PPL Corporation (PPL), based in Allentown, Pennsylvania, serves around 3.60 million customers with electricity and natural gas. With a market capitalization of $24.5 billion, the company operates power plants, supplies wholesale and retail energy, and distributes natural gas in Kentucky and Rhode Island. Additionally, PPL generates electricity from its facilities in Kentucky.
Shares of this leading utility company have slightly outperformed the broader market over the past year. PPL has gained 30.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 30.4%. In 2024, PPL’s stock is up 24.4%, surpassing SPX’s 23.1% rise on a YTD basis.
Zooming in further, PPL has outpaced the Utilities Select Sector SPDR Fund (XLU). The exchange-traded fund has gained about 28.3% over the past year.
On Nov. 1, PPL shares dropped 3.1% after announcing Q3 earnings results. It posted an adjusted profit of $0.42 per share, surpassing Wall Street’s forecast of $0.39 per share. The company reported revenue of $2.07 billion for the quarter and maintained its full-year earnings guidance, ranging from $1.67 to $1.73 per share.
For the current fiscal year, ending in December, analysts expect PPL’s EPS to grow 7.5% to $1.72 on a diluted basis. The company’s earnings surprise history is upbeat. It surpassed the consensus estimate in each of the last four quarters.
The consensus rating among the 14 analysts covering PPL stock is a “Moderate Buy” overall. That’s based on eight “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”
This consensus is slightly more bullish than two months ago when seven analysts recommended a “Strong Buy” for the stock.
On November 4, Bank of America Corporation (BAC) raised its price target for PPL to $35 from $34 while maintaining a “Buy” rating. The firm expressed surprise at the weak market reaction to PPL's Q3 update, noting that the in-line Q3 EPS, narrowed FY24 EPS guidance of $1.67-$1.73, and positive commentary on growth opportunities, including data center investments, should have bolstered the stock.
PPL's mean price target of $35.43 represents a premium of 5.1% from the prevailing price levels. The Street-high price target of $39 suggests an upside potential of 15.7%.
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