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PPL Stock Underperforms its Industry in Three Months: How to Play?
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PPL Corp. (PPL - Free Report) shares have gained 2.5% in the last three months compared with the Zacks Utility-Electric Power industry’s rally of 5.2%. In the same period, PPL also underperformed the Zacks Utilities sector.
PPL has exceeded earnings estimates in the first quarter of 2025 but missed expectations in the penultimate quarter. The company maintains a strong financial discipline and executes its plans efficiently.
Price Performance (Three Months)
Image Source: Zacks Investment Research
Despite near-term weakness in price, the average trading volume in the last three months remained strong, with nearly 5.83 million shares exchanged each day. The trading volume of another utility, DTE Energy (DTE - Free Report) , operating in the same industry averaged 1.56 million in the last three months.
Should you consider adding PPL to your portfolio based on the current softness in price movements? Let us delve deeper and find out the factors that can help investors decide whether it is a good entry point to add the PPL stock to their portfolios.
Factors Acting in Favour of the PPL Stock
PPL Corporation's service areas in Pennsylvania and Kentucky are experiencing growing interest from data centers, which is driving demand for the company’s services and is expected to support future performance. Between 2026 and 2034, new data center requests in these regions are projected to reach 50 gigawatts (GW) in Pennsylvania and 6 GW in Kentucky.
To meet rising demand and enhance service quality, PPL plans to invest $20 billion from 2025 through 2028. Notably, more than 60% of this capital investment program benefits from “contemporaneous recovery,” a mechanism that minimizes regulatory lag and supports timely earnings recovery from investments. This allows PPL to more effectively fund and manage long-term infrastructure projects.
The company is also continuing its cost-reduction initiatives, aiming to cut expenses by at least $175 million by 2026 compared to 2021 levels. Efficient cost management is expected to strengthen profit margins.
Along with data center-driven demand, both Pennsylvania and Kentucky continue to see customer and load growth. As more data centers connect to PPL’s network, the increased load is anticipated to reduce transmission costs for retail customers while also drawing more customers to PPL’s services.
To enhance system reliability and protect customers from current and future weather-related disruptions, PPL plans to invest over $8 billion in electric and gas distribution infrastructure between 2025 and 2028.
PPL Stock’s Earnings Estimate Moves Up
The company expects EPS of $1.75-$1.87 for 2025. The Zacks Consensus Estimate is currently pegged at $1.82 per share.
The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings per share indicates year-over-year increases of 7.5% and 8.26%, respectively. DTE Energy’s Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates year-over-year increases of 5.94% and 7.3%, respectively.
Image Source: Zacks Investment Research
PPL Stock’s Earnings Surprise History
The company has been a stable performer and has outperformed the Zacks Consensus Estimate in three of the last four reported quarters, with an average beat of 8.84%.
Image Source: Zacks Investment Research
Another utility, CenterPoint Energy (CNP - Free Report) , operates in the same space and has a choppy earnings surprise. The company missed earnings estimates in two out of the last four quarters, resulting in a negative earnings surprise of 2.11%.
PPL’s Capital Return Program
PPL continues to return value to its shareholders through dividend payments.
The company’s current annual dividend is $1.09. PPL projects dividend growth of 6-8% per year through 2027, subject to the approval of its board of directors. The dividend growth expectation is on par with its earnings growth expectation. It has raised its annual dividend four times in the past five years.
PPL’s targeted dividend payout ratio is expected to be in the range of 60-65%. With continued strength in its earnings and cash flow growth, the company is expected to continue boosting its dividend going forward. Check PPL’s dividend history here.
CenterPoint Energy, like other utilities, has distributed dividends and raised them eight times in the last five years. The current annual dividend rate is 88 cents.
PPL Stock Trades at a Premium
PPL Corporation is currently valued at a premium compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
PPL’s ROE Lower Than the Industry
PPL’s trailing 12-month return on equity of 9.14% is lower than the industry average of 10.05%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
Wrapping Up
PPL’s strategic investments in expanding clean energy generation and enhancing infrastructure are expected to support reliable service to its customers. The company also benefits from efficient operational management and a supportive regulatory environment, which further strengthens its competitive position.
While PPL’s ROE lags behind the industry average, weakness in share price and trading at a premium raise only modest concerns. Given its consistent dividend payments and anticipated load growth within its service areas, maintaining a position in this Zacks Rank #3 (Hold) stock remains a prudent choice for long-term investors.
Image: Bigstock
PPL Stock Underperforms its Industry in Three Months: How to Play?
PPL Corp. (PPL - Free Report) shares have gained 2.5% in the last three months compared with the Zacks Utility-Electric Power industry’s rally of 5.2%. In the same period, PPL also underperformed the Zacks Utilities sector.
PPL has exceeded earnings estimates in the first quarter of 2025 but missed expectations in the penultimate quarter. The company maintains a strong financial discipline and executes its plans efficiently.
Price Performance (Three Months)
Image Source: Zacks Investment Research
Despite near-term weakness in price, the average trading volume in the last three months remained strong, with nearly 5.83 million shares exchanged each day. The trading volume of another utility, DTE Energy (DTE - Free Report) , operating in the same industry averaged 1.56 million in the last three months.
Should you consider adding PPL to your portfolio based on the current softness in price movements? Let us delve deeper and find out the factors that can help investors decide whether it is a good entry point to add the PPL stock to their portfolios.
Factors Acting in Favour of the PPL Stock
PPL Corporation's service areas in Pennsylvania and Kentucky are experiencing growing interest from data centers, which is driving demand for the company’s services and is expected to support future performance. Between 2026 and 2034, new data center requests in these regions are projected to reach 50 gigawatts (GW) in Pennsylvania and 6 GW in Kentucky.
To meet rising demand and enhance service quality, PPL plans to invest $20 billion from 2025 through 2028. Notably, more than 60% of this capital investment program benefits from “contemporaneous recovery,” a mechanism that minimizes regulatory lag and supports timely earnings recovery from investments. This allows PPL to more effectively fund and manage long-term infrastructure projects.
The company is also continuing its cost-reduction initiatives, aiming to cut expenses by at least $175 million by 2026 compared to 2021 levels. Efficient cost management is expected to strengthen profit margins.
Along with data center-driven demand, both Pennsylvania and Kentucky continue to see customer and load growth. As more data centers connect to PPL’s network, the increased load is anticipated to reduce transmission costs for retail customers while also drawing more customers to PPL’s services.
To enhance system reliability and protect customers from current and future weather-related disruptions, PPL plans to invest over $8 billion in electric and gas distribution infrastructure between 2025 and 2028.
PPL Stock’s Earnings Estimate Moves Up
The company expects EPS of $1.75-$1.87 for 2025. The Zacks Consensus Estimate is currently pegged at $1.82 per share.
The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings per share indicates year-over-year increases of 7.5% and 8.26%, respectively. DTE Energy’s Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates year-over-year increases of 5.94% and 7.3%, respectively.
Image Source: Zacks Investment Research
PPL Stock’s Earnings Surprise History
The company has been a stable performer and has outperformed the Zacks Consensus Estimate in three of the last four reported quarters, with an average beat of 8.84%.
Image Source: Zacks Investment Research
Another utility, CenterPoint Energy (CNP - Free Report) , operates in the same space and has a choppy earnings surprise. The company missed earnings estimates in two out of the last four quarters, resulting in a negative earnings surprise of 2.11%.
PPL’s Capital Return Program
PPL continues to return value to its shareholders through dividend payments.
The company’s current annual dividend is $1.09. PPL projects dividend growth of 6-8% per year through 2027, subject to the approval of its board of directors. The dividend growth expectation is on par with its earnings growth expectation. It has raised its annual dividend four times in the past five years.
PPL’s targeted dividend payout ratio is expected to be in the range of 60-65%. With continued strength in its earnings and cash flow growth, the company is expected to continue boosting its dividend going forward. Check PPL’s dividend history here.
CenterPoint Energy, like other utilities, has distributed dividends and raised them eight times in the last five years. The current annual dividend rate is 88 cents.
PPL Stock Trades at a Premium
PPL Corporation is currently valued at a premium compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
PPL’s ROE Lower Than the Industry
PPL’s trailing 12-month return on equity of 9.14% is lower than the industry average of 10.05%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
Wrapping Up
PPL’s strategic investments in expanding clean energy generation and enhancing infrastructure are expected to support reliable service to its customers. The company also benefits from efficient operational management and a supportive regulatory environment, which further strengthens its competitive position.
While PPL’s ROE lags behind the industry average, weakness in share price and trading at a premium raise only modest concerns. Given its consistent dividend payments and anticipated load growth within its service areas, maintaining a position in this Zacks Rank #3 (Hold) stock remains a prudent choice for long-term investors.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.