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PNM Resources (PNM) Benefits From Clean Energy Goals & CAPEX

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

The company has a trailing four-quarter earnings surprise of 8.53%, on average. Its long-term (three-five years) earnings growth rate is pegged at 5.18%.

What’s Driving the Stock?

PNM Resources continues to invest substantially in its utility assets for providing reliable services to its customers. It aims to invest $3.98 billion during the 2021-2025time period to enhance its earnings.

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. Construction of the same started in the beginning of this year. We note that the company will play an important role with its expanding electricity transmission assets in the region.

The utility is also steadily taking measures to increase its renewable and battery storage capacity, thus moving toward clean energy transition. To this end, PNM Resources is focused on exiting coal-fired generation by 2024 and targets an emission-free portfolio within2040 to bring cleaner energy sources inits production process.

The company’s goal is to become carbon neutral before 2045. Also, it plans to replace 114 MW of leased capacity at the Palo Verde Nuclear Generating Station with solar and storage resources. Other utilities like Duke Energy (DUK - Free Report) , DTE Energy (DTE - Free Report) and Xcel Energy (XEL - Free Report) are too making efforts to supply clean energy.

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

Woes

However, the risk involved in operating at nuclear plants apart from abiding by the climate change-related stringent environmental policies and regulations remains a headwind to the company.