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WEC Energy Is Among The Only Utilities Argus Likes Regardless Of Interest Rate Environment

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WEC Energy Is Among The Only Utilities Argus Likes Regardless Of Interest Rate Environment

On Wednesday, WEC Energy Group Inc (NYSE: WEC) reported an EPS of $0.58 vs. estimates of $0.56 and revenues of $1.6 billion vs. estimates of $2.06 billion.

Argus' Take

Argus' Jim Kelleher raised WEC Energy's price target from $65.00 to $70.00, while reiterating the company's Buy rating.

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In general Argus analysts prefer to abstain from the utility industry during periods of rising interest rates due to the industry's heavy reliance on debt-financing and investors tend to migrate away from utilities while flocking towards bonds as fixed-income rates heighten. Kelleher, however, believes WEC Energy is "one of a few utilities that [...] can serve as a core holding in a diversified portfolio," regardless of the interest rate environment.

The WEC Difference

"WEC ranks among the nation's largest generators of electricity, and is the largest in the Midwest," stated Kelleher. The company is "well positioned" to drive future dividend and earnings growth due to its recent merger, in addition to investments in WEC's regulated businesses according to the Argus analyst.

Additionally, the analyst praised WEC management's increase in its long-term EPS growth target to 5–7 percent from 4–6 percent.

WEC Energy's optimistic dividend and earnings future will provide investors enough income to keep them from switching to bonds in a rising interest rate environment, according to Kelleher.

According to TipRanks, Jim Kelleher is among the better analyst's covering the utilities industry with a 60 percent success rate and a +8.4 percent average return per recommendation.

At the time of writing, WEC Energy traded at $64.91, flat in Monday's pre-market session.

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Latest Ratings for WEC

DateFirmActionFromTo
Jan 2021BarclaysUpgradesUnderweightEqual-Weight
Jan 2021KeyBancDowngradesOverweightSector Weight
Nov 2020Credit SuisseMaintainsUnderperform

View More Analyst Ratings for WEC
View the Latest Analyst Ratings

 

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