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PNM Resources' (PNM) Focus on Clean Energy & CAPEX Bode Well

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PNM Resources, Inc.’s (PNM - Free Report) planned infrastructure-related investments and efforts to provide reliable and affordable clean power will boost its performance. Also, the company’s adequate liquidity will allow it to meet its debt obligations.

We issued an updated research report on this presently Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has a trailing four-quarter earnings surprise of 9.27%, on average. Its long-term (three-five years) earnings growth rate is pegged at 4.87%.

What’s Driving the Stock?

PNM Resources continues to invest substantially in its utility assets for providing reliable services to its customers. The company plans to invest $3.96 billion during the 2021-2025 forecast period. It also expects a 5-6% earnings growth rate in the same time frame.

In New Mexico, the utility received approvals from both the Federal Energy Regulatory Commission and the New Mexico Public Regulation Commission to acquire the Western Spirit Transmission Line in 2021. We note that the company will play an important role with its expanding transmission assets in the region.

Also, the utility is steadily undertaking measures to increase its renewable and battery storage capacity, thus moving toward clean energy. To this end, the company aims to have a clean energy portfolio worth of 2,015 megawatt (MW) by 2022, up from 609 MW in 2019. Also, PNM Resources is focused on exiting coal-fired generation by 2024 and intends to have an emissions-free generating portfolio by 2040 and become carbon neutral before 2045.

Additionally, other utilities like Duke Energy (DUK - Free Report) , DTE Energy (DTE - Free Report) and Xcel Energy (XEL - Free Report) are making efforts to supply clean energy.

It boasts sufficient liquidity to meet its near-term obligations and fund capital investments despite the ongoing economic crisis.

Woes

However, the risk behind operating in nuclear plants apart from abiding by the climate change-related stringent environmental policies and regulations remain headwinds to the company.

Price Performance

In the past six months, shares of the company have gained 17.8%, outperforming the industry’s rise of 4%.

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