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PPL to Gain From Steady Investment in Clean Energy & Infrastructure
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Key Takeaways
PPL is developing infrastructure projects to provide reliable services to customers.
The company plans $20B in capital expenditure during 2025-2028.
PPL advances DLR and carbon-capture tech while expanding its renewable energy portfolio.
PPL Corporation (PPL - Free Report) has been benefiting from strategic investments in infrastructure development, including transmission and distribution projects and the construction of new clean-fuel-based generation plants, as it works toward achieving carbon neutrality by 2050.
The company’s long-term (three to five years) earnings growth rate is projected at 7.34%.
Tailwinds
PPL focuses on generation, transmission and distribution projects, which will strengthen its infrastructure. PPL’s subsidiary, PPL Electric, is also focused on increasing the reliability of its electricity supply services with the use of the Dynamic Line Rating (DLR) technology. PPL Electric was the first U.S. electric utility to integrate this technology into real-time and market operations.
PPL has planned a systematic long-term capital investment of $20 billion during 2025-2028. The company is expected to invest $4.3 billion and $5.2 billion in 2025 and 2026, respectively.
The investment is aimed at upgrading the grid, enhancing electricity and gas distribution, strengthening electricity transmission, and increasing clean energy generation capacity.
PPL also focuses on incorporating new technology to support increasing demand from data centers, while diversifying its generation portfolio by adding more renewable sources.
The decline in interest rates will be beneficial for the company as it will reduce the cost of long-term capital projects due to lower interest expenses.
PPL plans to introduce new carbon capture technology to achieve its carbon emissions reduction targets of 70% by 2035 and 80% by 2040, from 2010 levels, and ultimately become carbon neutral by 2050.
Headwinds
PPL is a holding company and operates entirely through its subsidiaries. All the assets are held by its subsidiaries, and income generation, debt repayment, and dividend obligations largely depend on those subsidiaries. If the subsidiaries underperform and are unable to distribute earnings, PPL’s financial results will be negatively affected.
PPL’s Pennsylvania Regulated segment faces competition for transmission projects. Any delays or failures to complete long-term projects on time or within budget, as well as unforeseen cost increases or risks related to fully recovering project costs, could negatively impact its financials.
Price Performance
Over the past year, PPL shares have risen 3.0%, but lagged the industry’s growth of 19.0%.
Dominion Energy, Entergy and PG&E delivered an average earnings surprise of 12.72%, 14.30% and 0.47%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2025 earnings per share of Dominion Energy and Entergy has moved up 0.29% and 0.26%, respectively, in the past 60 days.
The consensus mark for PG&E’s 2025 EPS has remained constant at $1.50 over the same time frame.
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PPL to Gain From Steady Investment in Clean Energy & Infrastructure
Key Takeaways
PPL Corporation (PPL - Free Report) has been benefiting from strategic investments in infrastructure development, including transmission and distribution projects and the construction of new clean-fuel-based generation plants, as it works toward achieving carbon neutrality by 2050.
The company’s long-term (three to five years) earnings growth rate is projected at 7.34%.
Tailwinds
PPL focuses on generation, transmission and distribution projects, which will strengthen its infrastructure. PPL’s subsidiary, PPL Electric, is also focused on increasing the reliability of its electricity supply services with the use of the Dynamic Line Rating (DLR) technology. PPL Electric was the first U.S. electric utility to integrate this technology into real-time and market operations.
PPL has planned a systematic long-term capital investment of $20 billion during 2025-2028. The company is expected to invest $4.3 billion and $5.2 billion in 2025 and 2026, respectively.
The investment is aimed at upgrading the grid, enhancing electricity and gas distribution, strengthening electricity transmission, and increasing clean energy generation capacity.
PPL also focuses on incorporating new technology to support increasing demand from data centers, while diversifying its generation portfolio by adding more renewable sources.
The decline in interest rates will be beneficial for the company as it will reduce the cost of long-term capital projects due to lower interest expenses.
PPL plans to introduce new carbon capture technology to achieve its carbon emissions reduction targets of 70% by 2035 and 80% by 2040, from 2010 levels, and ultimately become carbon neutral by 2050.
Headwinds
PPL is a holding company and operates entirely through its subsidiaries. All the assets are held by its subsidiaries, and income generation, debt repayment, and dividend obligations largely depend on those subsidiaries. If the subsidiaries underperform and are unable to distribute earnings, PPL’s financial results will be negatively affected.
PPL’s Pennsylvania Regulated segment faces competition for transmission projects. Any delays or failures to complete long-term projects on time or within budget, as well as unforeseen cost increases or risks related to fully recovering project costs, could negatively impact its financials.
Price Performance
Over the past year, PPL shares have risen 3.0%, but lagged the industry’s growth of 19.0%.
Zacks Rank & Stocks to Consider
PPL currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are Dominion Energy, Inc. (D - Free Report) , Entergy Corporation (ETR - Free Report) and PG&E Corporation (PCG - 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.
Dominion Energy, Entergy and PG&E delivered an average earnings surprise of 12.72%, 14.30% and 0.47%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2025 earnings per share of Dominion Energy and Entergy has moved up 0.29% and 0.26%, respectively, in the past 60 days.
The consensus mark for PG&E’s 2025 EPS has remained constant at $1.50 over the same time frame.