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CMS Leverages Grid Upgrades & Renewable Expansion to Drive Growth
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Key Takeaways
CMS plans nearly $24 billion in capital spending during 2026-2030 to modernize infrastructure.
CMS signed about 110 MW of new-load contracts in 2026 after connecting roughly 450 MW in 2025.
CMS contracted 850 MW of battery storage in Michigan, expected to be operational by 2028.
CMS Energy Corporation’s (CMS - Free Report) strong focus on infrastructure modernization and renewable energy investments is likely to support its performance, complemented by the stability of its regulated utility operations in Michigan.
However, this Zacks Rank #3 (Hold) company faces risks from costs associated with the closure of solid waste disposal facilities for coal ash.
Factors Acting in Favor of CMS
Demand from commercial and industrial customers remains a multi-year growth driver, supported by manufacturing and data center activity in the service territory. CMS has signed roughly 110 megawatts (MW) of new-load contracts year to date after connecting about 450 MW in 2025.
CMS Energy is making significant investments in infrastructure upgrades, replacement of aging assets and clean power generation to enhance customer reliability and improve system resiliency. To support these efforts, the company plans to invest nearly $24 billion in capital expenditures during 2026-2030. Backed by these strong investment plans, CMS Energy expects annual earnings per share to grow toward the high end of its long-term guided range of 6-8%.
The company has also secured contract to purchase 850 MW of battery storage capacity in Michigan that is expected to be operational by 2028. The company expects that its upcoming Integrated Resource Plan will include more than 13 GW of renewables and clean resources supported by about 1.5 GW of new natural gas capacity on existing sites.
Challenges Faced by CMS
Environmental compliance remains a cost risk as CMS Energy continues to manage coal combustion residuals and related disposal facilities. Consumers previously estimated $245 million in capital expenditures for coal ash solid waste disposal facilities during 2026-2030. Any additional permitting or remediation requirements could increase these costs, putting pressure on cash flows and complicating efforts to consistently expand margins.
CMS’ Share Price Performance
In the past six months, shares of the company have risen 2.3% compared with the industry’s 6% growth.
PAM’s long-term (three to five years) earnings growth rate is 2.92%. The company delivered an average earnings surprise of 80.9% in the last four quarters.
AWR’s long-term earnings growth rate is 6.93%. The Zacks Consensus Estimate for AWR’s 2026 earnings per share (EPS) implies an improvement of 10.1% year over year.
The Zacks Consensus Estimate for CLNE’s 2026 EPS implies a decline of 400% year over year. The company delivered an average earnings surprise of 87.5% in the last four quarters.
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CMS Leverages Grid Upgrades & Renewable Expansion to Drive Growth
Key Takeaways
CMS Energy Corporation’s (CMS - Free Report) strong focus on infrastructure modernization and renewable energy investments is likely to support its performance, complemented by the stability of its regulated utility operations in Michigan.
However, this Zacks Rank #3 (Hold) company faces risks from costs associated with the closure of solid waste disposal facilities for coal ash.
Factors Acting in Favor of CMS
Demand from commercial and industrial customers remains a multi-year growth driver, supported by manufacturing and data center activity in the service territory. CMS has signed roughly 110 megawatts (MW) of new-load contracts year to date after connecting about 450 MW in 2025.
CMS Energy is making significant investments in infrastructure upgrades, replacement of aging assets and clean power generation to enhance customer reliability and improve system resiliency. To support these efforts, the company plans to invest nearly $24 billion in capital expenditures during 2026-2030. Backed by these strong investment plans, CMS Energy expects annual earnings per share to grow toward the high end of its long-term guided range of 6-8%.
The company has also secured contract to purchase 850 MW of battery storage capacity in Michigan that is expected to be operational by 2028. The company expects that its upcoming Integrated Resource Plan will include more than 13 GW of renewables and clean resources supported by about 1.5 GW of new natural gas capacity on existing sites.
Challenges Faced by CMS
Environmental compliance remains a cost risk as CMS Energy continues to manage coal combustion residuals and related disposal facilities. Consumers previously estimated $245 million in capital expenditures for coal ash solid waste disposal facilities during 2026-2030. Any additional permitting or remediation requirements could increase these costs, putting pressure on cash flows and complicating efforts to consistently expand margins.
CMS’ Share Price Performance
In the past six months, shares of the company have risen 2.3% compared with the industry’s 6% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same sector are Pampa Energia (PAM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and American States Water (AWR - Free Report) and Clean Energy Fuels (CLNE - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAM’s long-term (three to five years) earnings growth rate is 2.92%. The company delivered an average earnings surprise of 80.9% in the last four quarters.
AWR’s long-term earnings growth rate is 6.93%. The Zacks Consensus Estimate for AWR’s 2026 earnings per share (EPS) implies an improvement of 10.1% year over year.
The Zacks Consensus Estimate for CLNE’s 2026 EPS implies a decline of 400% year over year. The company delivered an average earnings surprise of 87.5% in the last four quarters.