Xcel Energy (NASDAQ:XEL) shares fell more than 8% Thursday after the company disclosed that the Smokehouse Creek wildfire in Texas is burning in or near the company's service territory of Southwestern Public Service Company (SPS).
"As of February 28, 2024, at about 7:30 pm CT, the largest fire, named the Smokehouse Creek Fire, is reported to be approximately 900,000 acres in size and approximately 3% contained," the company stated.
In addition, Xcel said that on February 28, a law firm sent a letter to Xcel Energy to request that a fallen SPS utility pole that is situated within the vicinity of the fire’s potential area of origin be preserved.
Reacting to the news, KeyBanc Capital Markets analysts said that the details remain sparse, but given the current facts, they "view the erasure of ~$1.9B of XEL's market cap as an overreaction.
The firm stated that it is, however, understandable given the overall anxiety around wildfire-specific risk among investors. "Our views on XEL remain unchanged at this point as we await further details on the origins of the fire," they concluded.