KeyBanc remains positive on US utility sector despite 2025 macro trends concerns

Xcel Energy

04/12/2024 18:20

** KeyBanc Capital Markets says it remains positive for
utilities in 2025, but sees some headwinds for the sector
    ** Brokerage concerned with "inflation stagnating at
above-target levels and potentially accelerating from here due
to widely inflationary policies favored by the incoming
administration"
    ** However, KeyBanc expects the load growth trend, driven by
the data economy and reshoring of manufacturing, to offset these
headwinds
    ** Expects regulatory risk to remain subdued in 2025, with
states like Oregon, Texas, Ohio and Arizona, offering potential
catalysts for incumbent utilities 
    ** KeyBanc adds FERC proceedings will "continue to draw
investor attention during 2025, particularly as the tension
between nuclear operators and independent power producers
continues to mount"
    ** Brokerage downgrades DTE Energy  DTE.N  and Entergy
 ETR.N  to "sector weight"; upgrades Pinnacle West  PNW.N  to
"overweight"
 
    KeyBanc changes PT on the following firms:
 Company       New PT      Old PT      Upside to
                                       stock's last
                                       close
 FirstEnergy   $47         $48         14% 
  FE.N                                 
 WEC Energy    $109        $108        11% 
  WEC.N                                
 Xcel Energy   $79         $74         11% 
  XEL.O                                
 Portland      $51         $52         8% 
 Electric                              
  POR.N                                
 Pinnacle      $101        NA          11% 
 West  PNW.N                           
 
 (Reporting by Pooja Menon in Bengaluru)
 ((Pooja.Menon@thomsonreuters.com;))