On Aug 16, we issued an updated research report on PPL Corporation (PPL - Free Report) .
The company has recently reported second-quarter 2016 adjusted earnings of 56 cents per share, topping the Zacks Consensus Estimate of 53 cents by 5.7%. Reported earnings also increased 14.3% on a year-over-year basis. On the other hand, PPL Corp.’s total revenue of $1,785 million marginally beat the Zacks Consensus Estimate and was 0.2% higher than the year-ago tally of $1,781 million.
PPL Corp. continues to follow an organic growth strategy to expand and upgrade its utility systems. The company expects compound annual earnings growth of 5–6% in the 2017–2020 timeframe driven primarily by strong rate base hike in regulated operations. While domestic operations are anticipated to record earnings growth of 6–8%, earnings at UK operations are projected to grow 4–6% through 2020.
PPL Corp.’s capital investment plan focuses mainly on infrastructure construction projects for generation, transmission and distribution. The company projects total capital investment of $15.4 billion in the 2016–2020 timeframe to enhance reliability and resilience of the electrical grid.
To this end, PPL Corp. has undertaken the construction of a 475-mile transmission line, Project Compass, to benefit consumers in the Northeast with an estimated capital cost of $3–$4 billion. Based on planned infrastructure spending, the company expects rate base to grow 3.2% in Pennsylvania Regulated, 3.2% in Kentucky Regulated and 5.4% in UK Regulated through 2020.
However, PPL Corp.’s operations are subject to service disruptions in form of breakdown of equipment, natural calamities like hurricanes and earthquakes, and sudden outages. Such incidents not only obstruct the uninterrupted transmission of electricity but also increase maintenance costs, thereby adversely affecting the company’s cash flows.
Zacks Rank & Key Picks
PPL Corp. carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the utility space are Power Corp. (KEP - Free Report) , Spark Energy, Inc. and DTE Energy Company (DTE - Free Report) . Both Korea Electric and Spark Energy sport a Zacks Rank #1 (Strong Buy), while DTE Energy is a Zacks Rank #2 (Buy) stock.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Aug 16, we issued an updated research report on PPL Corporation (PPL - Free Report) .
The company has recently reported second-quarter 2016 adjusted earnings of 56 cents per share, topping the Zacks Consensus Estimate of 53 cents by 5.7%. Reported earnings also increased 14.3% on a year-over-year basis. On the other hand, PPL Corp.’s total revenue of $1,785 million marginally beat the Zacks Consensus Estimate and was 0.2% higher than the year-ago tally of $1,781 million.
PPL Corp. continues to follow an organic growth strategy to expand and upgrade its utility systems. The company expects compound annual earnings growth of 5–6% in the 2017–2020 timeframe driven primarily by strong rate base hike in regulated operations. While domestic operations are anticipated to record earnings growth of 6–8%, earnings at UK operations are projected to grow 4–6% through 2020.
PPL Corp.’s capital investment plan focuses mainly on infrastructure construction projects for generation, transmission and distribution. The company projects total capital investment of $15.4 billion in the 2016–2020 timeframe to enhance reliability and resilience of the electrical grid.
To this end, PPL Corp. has undertaken the construction of a 475-mile transmission line, Project Compass, to benefit consumers in the Northeast with an estimated capital cost of $3–$4 billion. Based on planned infrastructure spending, the company expects rate base to grow 3.2% in Pennsylvania Regulated, 3.2% in Kentucky Regulated and 5.4% in UK Regulated through 2020.
However, PPL Corp.’s operations are subject to service disruptions in form of breakdown of equipment, natural calamities like hurricanes and earthquakes, and sudden outages. Such incidents not only obstruct the uninterrupted transmission of electricity but also increase maintenance costs, thereby adversely affecting the company’s cash flows.
Zacks Rank & Key Picks
PPL Corp. carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the utility space are Power Corp. (KEP - Free Report) , Spark Energy, Inc. and DTE Energy Company (DTE - Free Report) . Both Korea Electric and Spark Energy sport a Zacks Rank #1 (Strong Buy), while DTE Energy is a Zacks Rank #2 (Buy) stock.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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