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Xcel (XEL) Down 7.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Xcel Energy (XEL - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Xcel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Xcel Energy Q4 Earnings Match Estimates, Revenues Rise Y/Y

Xcel Energy posted fourth-quarter 2020 operating earnings of 54 cents per share, inline with the Zacks Consensus Estimate. Meanwhile, the bottom line fell 3.6% from the year-ago earnings of 56 cents per share.

Total Revenues

Xcel Energy’s fourth-quarter revenues of $2,947 million missed the Zacks Consensus Estimate of $3,051 million by 3.4%. However, the top line improved 5.3% from the prior-year quarter’s $2,798 million. This upside is mainly on higher contribution from the electric and natural gas segment than the prior-year quarter.

Segmental Results

Electric: Revenues rose 6.3% to $2,372 million from $2,231 million in the year-ago quarter.

Natural Gas: Revenues improved 1.8% from the year-ago quarter’s $544 million to $554 million.

Other: Revenues in the segment fell 8.7% to $21 million from the year-ago quarter’s $23 million.

Quarterly Highlights

Total operating expenses increased 7.4% year over year to $2,521 million, primarily due to higher electric fuel and purchased power as well as elevated operating and maintenance expenses.

Operating income in the reported quarter dipped 5.3% from the prior-year quarter to $426 million.

Total interest charges and financing costs in the reported quarter rose 9.7% from the prior-year figure to $203 million.

Looking Ahead

Xcel Energy reaffirmed 2021 EPS guidance in the range of $2.90-$3. Also, the utility plans to invest $4,475 million in 2021 and its total capital investment plan is $23,500 million for the 2021-2025 time period. The company anticipates delivering long-term annual EPS growth of 5-7%, dependent on the 2020 baseline of $2.78 per share. Xcel Energy projects an annual dividend rate hike of 5-7% and a payout ratio of 60-70%.

How Have Estimates Been Moving Since Then?

Estimates review followed a downward path over the past two months.

VGM Scores

At this time, Xcel has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Xcel has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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