Back to top

Analyst Blog

On Apr. 3, 2013, the shares of power transmission, distribution and generation operator Xcel Energy Inc. (XEL - Analyst Report) climbed to a new 52-week high of $30.07 driven by a string of successful midstream initiatives. Xcel Energy continued with its good run by reporting consistent earnings surprise in the past four quarters bringing the average surprise to 5.79%.

Competitive power rate offerings, favorable outcomes from NSP Minnesota and NSP Wisconsin regulatory cases as well as tighter cost-containment efforts proved to be the key factors propelling the company’s stock to a new high.

In the meantime, the company’s increasing focus towards creating a balanced generation assets met with success as it accomplished a generating capacity of 1,713 megawatt of wind energy in Colorado.

With the current pulse in the U.S. market that favors clean energy, we believe Xcel Energy’s target of 30% power generation from renewables by 2020 will sit well with the company’s future growth objectives.

Upon receiving regulatory consent, Xcel Energy’s premier CapX2020 transmission project is expected to be the major highlight in 2013. Moreover, its infrastructure upgrade program will result in greater service reliability and help retain its customer base.

Furthermore, a sound liquidity position will allow the company to fulfill its future financial commitments while stable credit ratings would further help Xcel Energy to raise debt and reduce borrowing cost.

Presently, Xcel Energy carries a Zacks Rank #2 (Buy). However, other utility stocks currently performing well are Zacks Rank #1 (Strong Buy) Otter Tail Corp. (OTTR - Snapshot Report), Pike Electric Corp. (PIKE - Snapshot Report) and Edison International (EIX - Analyst Report).

Please login to Zacks.com or register to post a comment.