On Friday, BMO Capital Markets adjusted its price target on shares of Ameren Corp . (NYSE: AEE), bringing it down to $93 from the previous $95, while reiterating an Outperform rating on the stock. The revision follows Ameren's quarterly earnings report, which disclosed earnings per share (EPS) of $1.87, slightly below the $1.90 to $1.93 range anticipated by consensus and BMO's own forecasts.
Ameren's management has also refined its earnings guidance for 2024, now projecting a range between $4.55 and $4.69. The updated midpoint of this range, $4.62, aligns with the expectations set by BMO and the consensus. Additionally, the company has provided its 2025 earnings outlook earlier than usual, with a forecast range of $4.85 to $5.05, which surpasses the consensus and BMO estimates of $4.92 and $4.90, respectively. This guidance suggests a year-over-year growth of 7.1%.
The company has confirmed its commitment to achieving an EPS growth rate of 6-8% and a rate base growth of approximately 8.2%. In light of these affirmations, BMO Capital has maintained its Outperform rating on Ameren Corp. shares. The price target adjustment to $93 reflects changes in market conditions, specifically the peer group multiples used in BMO's sum-of-the-parts (SOTP) valuation method.
In other recent news, Ameren Corporation (NYSE:AEE) reported a steady adjusted earnings of $1.87 per share for the third quarter of 2024, matching the previous year's results. The company anticipates earnings to rise in 2025 and maintains a 6% to 8% compound annual earnings growth rate through 2028. Ameren's investment in infrastructure, including three new solar centers and the Castle Bluff natural gas energy center, has reached $3 billion year-to-date.
The company's 10-year investment pipeline exceeds $55 billion, aiming to bolster economic growth and job creation. Ameren plans to issue $300 million of common equity in 2024 to back its capital investments. The company is navigating potential impacts of recent elections on tax policies and EPA regulations, which could influence future capital expenses and customer rates.
Ameren is also managing ongoing regulatory proceedings, including customer refunds mandated by FERC's October 2024 order. The company has secured commitments for approximately 350 megawatts of new load, primarily in Missouri, and expects to create over 2,200 jobs through its investment in infrastructure.
InvestingPro Insights
Ameren Corp.'s (NYSE: AEE) financial profile, as revealed by InvestingPro data, offers additional context to BMO Capital's analysis. The company's market capitalization stands at $24.02 billion, with a P/E ratio of 20.33, slightly above the industry average. This valuation aligns with an InvestingPro Tip indicating that AEE is "Trading at a high P/E ratio relative to near-term earnings growth," which investors should consider in light of BMO's adjusted price target.
Despite the slight miss in quarterly earnings, Ameren's long-term stability is underscored by another InvestingPro Tip noting that the company "Has maintained dividend payments for 27 consecutive years." This consistency in shareholder returns, coupled with a current dividend yield of 3.1%, may support BMO's Outperform rating.
The company's financial health is further reflected in its profitability, with InvestingPro data showing a gross profit margin of 52.05% for the last twelve months as of Q2 2024. This robust margin, along with the InvestingPro Tip that "Analysts predict the company will be profitable this year," aligns with Ameren's positive earnings guidance for 2024 and 2025.
For investors seeking a deeper understanding of Ameren's financial position, InvestingPro offers 6 additional tips, providing a more comprehensive analysis of the company's prospects and potential risks.
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