Minneapolis, Minnesota-based Xcel Energy Inc. (XEL) generates, purchases, transmits, distributes, and sells electricity. With a market cap of $39.4 billion, Xcel operates through the Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments.
The utilities major has lagged behind the broader market over the past year. XEL has gained 10.9% on a YTD basis and 16% over the past 52 weeks, compared to the S&P 500 Index’s ($SPX) 25.8% gains in 2024 and 35.9% return over the past year.
Narrowing the focus, XEL has also underperformed the Utilities Select Sector SPDR Fund’s (XLU) surge of 25.4% in 2024 and 31.6% over the past year.
Despite missing Wall Street’s earnings and revenue estimates, XEL stock soared around 6% after the release of its Q3 earnings on Oct. 31. The company reported a 49 basis-point year-over-year dip in total operating revenues to $3.6 billion, falling short of Wall Street’s topline estimates by a notable 8.1%. Its non-GAAP adjusted EPS grew by a modest 1.6% compared to the year-ago quarter to $1.25 which also fell short of analysts' consensus estimates by 3.1%. However, the company reaffirmed its FY 2024 adjusted EPS guidance of $3.50 to $3.60 and gave an EPS guidance of $3.75 to $3.85 for 2025 which reinstated investors' confidence in the company. Additionally, Xcel is expected to benefit from new customer acquisition and rising demand from data centers in the coming quarters enhancing its prospects.
For the current fiscal 2024, ending in December, analysts expect Xcel to report a nearly 6% year-over-year growth in adjusted EPS to $3.55. The company’s earnings surprise history is mixed. It missed Wall Street’s bottom-line estimate in three of the past four quarters while exceeding on another occasion.
XEL stock has a consensus “Moderate Buy” rating overall. Among the 16 analysts covering the stock, nine advise “Strong Buy” and seven recommend a “Hold” rating.
This configuration is more bullish than three months ago, with seven “Strong Buy” ratings on the stock.
On Nov. 1, KeyBanc analyst Sophie Karp maintained an “Outperform” rating on XEL while raising the price target to $74.
Xcel’s mean price target of $70.67 represents a premium of only 2.9% to current price levels. The Street-high target of $78 suggests a potential upside of 13.6%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
