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WEC Energy (WEC) Gains From Focus on Clean Energy, Investments
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WEC Energy Group’s (WEC - Free Report) ongoing investments in infrastructure projects and focus on clean energy should further drive its overall performance. The company continues to expand operations through strategic acquisitions.
However, this Zacks Rank #4 (Sell) company faces risks related to increasing competition in the energy space.
Tailwinds
WEC Energy is gaining on the back of improving demand from large and small commercial and industrial (C&I) customers, as well as from the residential space. On average, more than 60% of the company’s electricity is sold to the C&I group. Hence, the improving demand from this group will boost WEC Energy’s performance.
Based on improving conditions in the company’s service area, it continues to witness an uptick in customer volumes. WEC expects weather-normalized electric and gas sales for the Wisconsin segment to grow 0.7-1% year over year during 2026-2028. Courtesy of the contribution from organic and inorganic assets, WEC Energy expects compound earnings growth of 6.5-7% through 2028.
During 2024-2028, WEC plans to invest $23.7 billion, up $300 million from the previous projection. The idea is to further strengthen the company’s renewable portfolio.
WEC Energy is also focused on replacing older generation facilities with zero-carbon-emitting renewable and natural gas-based generation by 2025. WEC has retired 1,900 megawatts (MW) of coal-fired plants since 2018 and aims to remove another 1,500 MW of fossil-fueled generation by 2026.
Headwinds
WEC Energy’s ability to obtain and retain customers, including wholesale customers, due to increased competition in its electric and natural gas markets from retail choice and alternative electric suppliers and continued industry consolidation is a concern.
The company’s operations are subject to significant state, local and federal governmental regulations, which may affect WEC Energy’s ability to recover costs from utility customers.
DTE’s long-term (three-to-five-year) earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS indicates an increase of 16.9% from the previous year’s reported number.
NiSource’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for NI’s 2024 EPS implies an improvement of 6.9% from that recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS implies a year-over-year decrease of 67.5%. The company delivered an average earnings surprise of 142.6% in the last four quarters.
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WEC Energy (WEC) Gains From Focus on Clean Energy, Investments
WEC Energy Group’s (WEC - Free Report) ongoing investments in infrastructure projects and focus on clean energy should further drive its overall performance. The company continues to expand operations through strategic acquisitions.
However, this Zacks Rank #4 (Sell) company faces risks related to increasing competition in the energy space.
Tailwinds
WEC Energy is gaining on the back of improving demand from large and small commercial and industrial (C&I) customers, as well as from the residential space. On average, more than 60% of the company’s electricity is sold to the C&I group. Hence, the improving demand from this group will boost WEC Energy’s performance.
Based on improving conditions in the company’s service area, it continues to witness an uptick in customer volumes. WEC expects weather-normalized electric and gas sales for the Wisconsin segment to grow 0.7-1% year over year during 2026-2028. Courtesy of the contribution from organic and inorganic assets, WEC Energy expects compound earnings growth of 6.5-7% through 2028.
During 2024-2028, WEC plans to invest $23.7 billion, up $300 million from the previous projection. The idea is to further strengthen the company’s renewable portfolio.
WEC Energy is also focused on replacing older generation facilities with zero-carbon-emitting renewable and natural gas-based generation by 2025. WEC has retired 1,900 megawatts (MW) of coal-fired plants since 2018 and aims to remove another 1,500 MW of fossil-fueled generation by 2026.
Headwinds
WEC Energy’s ability to obtain and retain customers, including wholesale customers, due to increased competition in its electric and natural gas markets from retail choice and alternative electric suppliers and continued industry consolidation is a concern.
The company’s operations are subject to significant state, local and federal governmental regulations, which may affect WEC Energy’s ability to recover costs from utility customers.
Stocks to Consider
Some better-ranked stocks from the same industry are DTE Energy (DTE - Free Report) , NiSource Inc. (NI - Free Report) and TransAlta (TAC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DTE’s long-term (three-to-five-year) earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS indicates an increase of 16.9% from the previous year’s reported number.
NiSource’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for NI’s 2024 EPS implies an improvement of 6.9% from that recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS implies a year-over-year decrease of 67.5%. The company delivered an average earnings surprise of 142.6% in the last four quarters.