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PPL Gains 10.9% in a Year: How Should You Play the Stock?
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Key Takeaways
PPL shares rose 10.9% in a year, outpacing the Zacks Utility-Electric Power industry's 6.5% rally.
The company targets $20B in regulated capital investments between 2025 and 2028.
PPL plans dividend growth of 6-8% through 2028, backed by earnings and cash flow expansion.
PPL Corporation (PPL - Free Report) shares have gained 10.9% in a year compared with the Zacks Utility-Electric Power industry’s rally of 6.5%. PPL is benefiting from its strategic investments that should further expand its clean energy generation capacity and help achieve carbon neutrality by 2050.
Shares of another operator in the same industry, FirstEnergy Corp. (FE - Free Report) , have lost 2.2% during the same period. However, it is benefiting from its investments focused on enhancing transmission and distribution operations, which are expected to improve service efficiency. FirstEnergy’s ‘Energize365’ is a multi-year grid evolution platform, focused on enhancing customer experience while maintaining its strong affordability position with rates at or below its in-state peers.
Image Source: Zacks Investment Research
Given the current increase in price performance, should you consider including PPL in your portfolio? Let's examine the factors in detail and assess the stock's investment prospects.
Factors Driving the Performance of PPL Stock
PPL benefits from its focus on infrastructure construction projects for generation, transmission and distribution. Customers have been experiencing far less outages, courtesy of the company’s initiative to further strengthen its infrastructure. PPL expects a regulated capital investment plan of $20 billion during 2025-2028. The capital investment for 2025 and 2026 is expected to be $4.3 billion and $5.2 billion, respectively.
The company is also experiencing load growth, driven by increasing demand from data centers. Nearly 14.4 gigawatt (GW) of potential data center demand is in the advanced stages, representing a potential transmission capital investment of $0.75-$1.25 billion. Active data center requests have increased to 50 GW for the 2026-2034 period in the Pennsylvania segment. In the Kentucky segment, the Economic development queue holds total potential load growth of 8.5 GW, which includes active data center requests of 6 GW from 2026 to 2032 and 3 GW of manufacturing and other non-data center load.
The company’s carbon emission reduction target is in sync with the objective of meeting the below 2-degree Celsius scenario. PPL plans to achieve its carbon emissions target of 70% by 2035 and 80% by 2040, relative to 2010 levels. By 2050, it also aims to achieve carbon neutrality.
PPL benefits from digital transformation and automation by using advanced technology to enhance grid reliability and improve customer experience. The company’s “Self-Healing Grid” responds to issues in real-time for improved reliability at a lower cost.
PPL expects its operating and maintenance (O&M) costs to reduce at least $150 million by 2025 and $175 million by 2026. In the second quarter of 2025, PPL was able to reduce O&M costs by 1.4% year over year. These initiatives are expected to enhance the company’s margins and support earnings growth.
PPL Stock’s Earnings Estimate
The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings per share (EPS) indicates an increase of 7.69% and 8.42%, respectively, year over year.
Image Source: Zacks Investment Research
Another company, Alliant Energy (LNT - Free Report) , expects long-term capital expenditure of $11.5 billion during 2025-2028 to improve infrastructure and enhance service reliability. LNT also aims to make technology investments that help reduce operating costs and further enhance the customer experience. The Zacks Consensus Estimate for Alliant Energy’s 2025 and 2026 EPS indicates an increase of 5.92% and 6.83%, respectively, year over year.
PPL Stock’s Earnings Surprise History
PPL beat on earnings in two of the trailing four quarters and missed in the other two, delivering a negative surprise of 0.18%.
Image Source: Zacks Investment Research
FirstEnergy also beat on earnings in two of the trailing four quarters and missed in two, delivering an average surprise of 1.2%.
PPL’s Dividend History
PPL has a long history of dividend payments and plans to increase its annual dividend by 6-8% through at least 2028, subject to approval by its board of directors. Currently, its quarterly dividend is 27.25 cents per share, resulting in an annualized dividend of $1.09 per share.
PPL’s targeted dividend payout ratio is expected to be in the range of 60-65%. It is anticipated that the company will continue to increase its dividend in the future, driven by its sustained earnings and cash flow growth. Check PPL’s dividend history here.
PPL’s ROE Lower Than the Industry
PPL’s trailing 12-month return on equity of 8.81% is lower than the industry average of 10.14%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
PPL Stock Trades at a Premium
PPL is currently trading at a premium compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
Alliant Energy is also trading at a premium compared with its industry’s P/E F 12M.
Summing Up
PPL continues to benefit from systematic investments and increased demand from data centers in its service regions. PPL’s focus on cleaner generation and growth in domestic operations also acts as a tailwind.
However, PPL’s lower ROE compared to its industry average and the stock’s premium valuation create concerns at the moment.
The investors can hold onto this Zacks Rank #3 (Hold) stock and enjoy the benefits of regular dividends and earnings growth estimates. Given its premium valuation, new investors can wait and look for a better entry point.
Image: Bigstock
PPL Gains 10.9% in a Year: How Should You Play the Stock?
Key Takeaways
PPL Corporation (PPL - Free Report) shares have gained 10.9% in a year compared with the Zacks Utility-Electric Power industry’s rally of 6.5%. PPL is benefiting from its strategic investments that should further expand its clean energy generation capacity and help achieve carbon neutrality by 2050.
Shares of another operator in the same industry, FirstEnergy Corp. (FE - Free Report) , have lost 2.2% during the same period. However, it is benefiting from its investments focused on enhancing transmission and distribution operations, which are expected to improve service efficiency. FirstEnergy’s ‘Energize365’ is a multi-year grid evolution platform, focused on enhancing customer experience while maintaining its strong affordability position with rates at or below its in-state peers.
Image Source: Zacks Investment Research
Given the current increase in price performance, should you consider including PPL in your portfolio? Let's examine the factors in detail and assess the stock's investment prospects.
Factors Driving the Performance of PPL Stock
PPL benefits from its focus on infrastructure construction projects for generation, transmission and distribution. Customers have been experiencing far less outages, courtesy of the company’s initiative to further strengthen its infrastructure. PPL expects a regulated capital investment plan of $20 billion during 2025-2028. The capital investment for 2025 and 2026 is expected to be $4.3 billion and $5.2 billion, respectively.
The company is also experiencing load growth, driven by increasing demand from data centers. Nearly 14.4 gigawatt (GW) of potential data center demand is in the advanced stages, representing a potential transmission capital investment of $0.75-$1.25 billion. Active data center requests have increased to 50 GW for the 2026-2034 period in the Pennsylvania segment. In the Kentucky segment, the Economic development queue holds total potential load growth of 8.5 GW, which includes active data center requests of 6 GW from 2026 to 2032 and 3 GW of manufacturing and other non-data center load.
The company’s carbon emission reduction target is in sync with the objective of meeting the below 2-degree Celsius scenario. PPL plans to achieve its carbon emissions target of 70% by 2035 and 80% by 2040, relative to 2010 levels. By 2050, it also aims to achieve carbon neutrality.
PPL benefits from digital transformation and automation by using advanced technology to enhance grid reliability and improve customer experience. The company’s “Self-Healing Grid” responds to issues in real-time for improved reliability at a lower cost.
PPL expects its operating and maintenance (O&M) costs to reduce at least $150 million by 2025 and $175 million by 2026. In the second quarter of 2025, PPL was able to reduce O&M costs by 1.4% year over year. These initiatives are expected to enhance the company’s margins and support earnings growth.
PPL Stock’s Earnings Estimate
The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings per share (EPS) indicates an increase of 7.69% and 8.42%, respectively, year over year.
Image Source: Zacks Investment Research
Another company, Alliant Energy (LNT - Free Report) , expects long-term capital expenditure of $11.5 billion during 2025-2028 to improve infrastructure and enhance service reliability. LNT also aims to make technology investments that help reduce operating costs and further enhance the customer experience. The Zacks Consensus Estimate for Alliant Energy’s 2025 and 2026 EPS indicates an increase of 5.92% and 6.83%, respectively, year over year.
PPL Stock’s Earnings Surprise History
PPL beat on earnings in two of the trailing four quarters and missed in the other two, delivering a negative surprise of 0.18%.
Image Source: Zacks Investment Research
FirstEnergy also beat on earnings in two of the trailing four quarters and missed in two, delivering an average surprise of 1.2%.
PPL’s Dividend History
PPL has a long history of dividend payments and plans to increase its annual dividend by 6-8% through at least 2028, subject to approval by its board of directors. Currently, its quarterly dividend is 27.25 cents per share, resulting in an annualized dividend of $1.09 per share.
PPL’s targeted dividend payout ratio is expected to be in the range of 60-65%. It is anticipated that the company will continue to increase its dividend in the future, driven by its sustained earnings and cash flow growth. Check PPL’s dividend history here.
PPL’s ROE Lower Than the Industry
PPL’s trailing 12-month return on equity of 8.81% is lower than the industry average of 10.14%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
PPL Stock Trades at a Premium
PPL is currently trading at a premium compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
Alliant Energy is also trading at a premium compared with its industry’s P/E F 12M.
Summing Up
PPL continues to benefit from systematic investments and increased demand from data centers in its service regions. PPL’s focus on cleaner generation and growth in domestic operations also acts as a tailwind.
However, PPL’s lower ROE compared to its industry average and the stock’s premium valuation create concerns at the moment.
The investors can hold onto this Zacks Rank #3 (Hold) stock and enjoy the benefits of regular dividends and earnings growth estimates. Given its premium valuation, new investors can wait and look for a better entry point.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.