🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

CenterPoint Energy shares target raised by KeyBanc on growth prospects

EditorEmilio Ghigini
Published 20/05/2024, 14:20

On Monday, CenterPoint Energy (NYSE:CNP) shares saw its price target increased to $33.00, up from the previous $31.00, while its stock rating remained Overweight by KeyBanc. This adjustment reflects the company's robust capital investment plan, which is expected to significantly enhance its rate base growth over the coming years.

KeyBanc's analysis highlights CenterPoint Energy's capital plan extending to 2030, which aims to achieve a 10% rate base compound annual growth rate (CAGR). This strategic growth is set to position the utility company favorably, potentially delivering earnings per share (EPS) growth in the higher range of its projected 6-8% long-term CAGR.

The company also has additional opportunities that could further enhance its financial performance. Notably, CenterPoint Energy has approximately $500 million in potential gains linked to a recent system resiliency filing in Texas. This development could provide a significant boost to the company's earnings and justify a higher market valuation.

In light of these factors, KeyBanc justifies the increased price target by applying a 19.5x multiple to CenterPoint Energy's projected earnings. The firm's stance indicates a belief that CenterPoint Energy is well-positioned to outperform its sector peers and should, therefore, command a premium in the market.

CenterPoint Energy's focus on long-term growth and resilience improvements, coupled with the favorable rate base CAGR, underpins KeyBanc's positive outlook on the stock. The revised price target of $33.00 is a testament to the company's potential to deliver strong financial results in the years ahead.

InvestingPro Insights

Following the recent price target increase for CenterPoint Energy (NYSE:CNP) by KeyBanc, it's worth noting additional insights from InvestingPro that could further inform investors about the company's position. The company's market capitalization stands at $19.24 billion, and it's trading at a P/E ratio of 20.97, which may appear steep given the near-term earnings growth. However, an InvestingPro Tip highlights that 4 analysts have revised their earnings upwards for the upcoming period, suggesting a potential upside that could justify the current P/E ratio.

InvestingPro data also reveals a dividend yield of 2.66% as of the last dividend ex-date on May 15, 2024, which underlines the company's commitment to returning value to shareholders, having maintained dividend payments for 54 consecutive years. Furthermore, CenterPoint Energy's liquid assets exceed its short-term obligations, providing financial flexibility and stability.

Investors looking for additional insights and tips can find them on InvestingPro, with a total of 8 InvestingPro Tips available for CenterPoint Energy, offering a deeper dive into the company's financial health and market performance. For those interested in accessing these insights, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.