With a market cap of around $30 billion, WEC Energy Group, Inc. (WEC) is a diversified energy holding company providing regulated natural gas and electricity services across the United States. The Milwaukee, Wisconsin-based company generates electricity from coal, natural gas, oil, nuclear, and renewable sources like wind, solar, hydroelectric, and biomass.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and WEC Energy Group fits this criterion perfectly, exceeding the mark. It operates an extensive infrastructure network, including over 35,000 miles of electric distribution lines, 46,000 miles of natural gas mains, and underground gas storage facilities with 69.3 billion cubic feet of capacity.
The electricity and natural gas provider pulled back 7.9% from its 52-week high of $102.79. Shares of WEC are down 1.1% over the past three months, underperforming the broader S&P 500 Index's ($SPX) 7.4% rise in the same period.
Longer term, on a YTD basis, shares of WEC Energy Group have surged 12.5%, lagging behind SPX's 26.9% increase. In addition, WEC has risen 14.9% over the past 52 weeks, compared to SPX's 28.2% return.
Since mid-July, WEC Energy Group's stock has been bullish, staying above its 50-day and 200-day moving averages. Recently, however, the stock has slipped below its 50-day moving average.
Despite stronger-than-expected Q3 adjusted earnings of $0.82 per share, WEC Energy's shares fell marginally on Oct. 31 due to declining year-over-year metrics and missed revenue expectations. The 4.8% drop in operating revenues of $1.9 billion, coupled with an 18% decline in earnings from the prior year and a 5.2% reduction in total electric sales volume, raised concerns about growth sustainability. Additionally, higher interest expenses and rising long-term debt signaled potential financial pressures, tempering investor enthusiasm.
Nevertheless, the stock’s rival, Eversource Energy (ES), has seen a 5.4% dip over the past 52 weeks and a 5.2% decline on a YTD basis, lagging behind WEC's performances in both periods.
Due to WEC’s underperformance relative to SPX, analysts are cautious about the stock's prospects. The stock has a consensus rating of “Hold” from the 17 analysts covering it, and it is currently trading below the mean price target of $98.97.
