Alliant Energy (LNT) to Gain From Investments, Clean Portfolio
Alliant Energy Corporation’s LNT investments in natural gas projects and stable returns from regulated assets will further drive its bottom line. The company’s focus on electricity generated from clean assets will help serve its expanding customer base.
However, this Zacks Rank #3 (Hold) company’s dependence on third-party assets for transmission acts as a headwind.
Tailwinds
Alliant Energy plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to its generation portfolio. It expects investments of $9.1 billion during 2024-2027. The company's strong and flexible investment plans will support an 8% base CAGR during the same period.
LNT’s earnings prospects look attractive due to ongoing additions to electric and natural gas customer volumes. Its geographic location and favorable regulatory developments bode well for the advancement of wind projects and the company’s long-term earnings growth. The ongoing economic growth in its service territories and increasing customer base are also creating fresh demand for utility services and boosting LNT’s performance.
The company is successfully completing major construction projects on time and at or below budget. A constructive regulatory environment will enable it to recover capital expenditures.
Alliant Energy continues to be the largest owner-operator of solar energy in Wisconsin. It has all solar sites and panels in control for its planned 1.1 gigawatts of utility-scale solar projects within the state by mid-2024.
Headwinds
Alliant Energy’s utility operations — IPL and WPL — use the interstate electric transmission system that they do not own or control. Rates charged to these subsidiaries are regulated by FERC. In case transmission costs go up and the company is unable to recover those costs from its customers, operational expenses are bound to rise.
A fall in the performance of the third-party electric transmission system will limit LNT’s ability to transmit electricity within its service territories and adversely impact its operations.
Stocks to Consider
Some better-ranked stocks from the same industry are Consolidated Edison ED, Exelon Corporation EXC and NiSource Inc. NI, 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.
ED’s long-term (three to five years) earnings growth rate is 2%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) indicates a year-over-year increase of 7.9%.
EXC’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS indicates a year-over-year improvement of 4%.
NI’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for 2023 EPS indicates year-over-year growth of 8.2%.
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Exelon Corporation (EXC) : Free Stock Analysis Report
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Alliant Energy Corporation (LNT) : Free Stock Analysis Report
