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CenterPoint Hits 52-Week High Backed by Customer Addition

Zacks Equity Research

CenterPoint Energy Inc. CNP hit a new 52-week high of $28.24 on Apr 17. The stock delivered a one-year return of about 34.5%, while the S&P 500 gained 10.5% over the same time frame.

Over the past one year, CenterPoint Energy’s share price has ranged from a low of $20.46 to a high of $28.24. Average volume of shares traded over the last three months is approximately 3 million.

Factors that Back the Rise

CenterPoint Energy reported positive earnings surprise in two out of the last four quarters, resulting in a positive average surprise of 0.40%. The long term earnings growth of the company is pegged at 5.00%.

A steady growth in customer count has mainly driven CenterPoint Energy’s performance over the last several quarters. In 2016, the company added over 54,000 meter customers under its Electric Transmission & Distribution segment. This represents an annual growth rate of 2%. Moreover, CenterPoint added 35,000 users at the Gas Utility business last year.

In Jan 2017, the company’s unit, CES, completed the acquisition of Atmos Energy's retail energy services business, Atmos Energy Marketing, LLC. The acquisition will allow CenterPoint Energy Services to gain access to new markets and customer segments more efficiently. Moreover, Atmos Energy Marketing’s operational and geographic footprint will enable it to unlock growth opportunities and maintain focus on improving customer service and creating a cost-effective organizational structure.

CenterPoint Energy invested in excess of $1.4 billion in 2016 to strengthen its infrastructure and improve reliability of its operations. The company plans to invest nearly $1.5 billion in 2017 and has set a capital outlay of $7.0 billion from 2017 through 2021.The systematic investment plans will help it to achieve its targeted annual earnings growth of 4%–6%.

Thanks to the positive development, the Zacks Consensus Estimate for 2017 and 2018 moved up by 1.6% and 0.8% in the last 60 days and is presently pegged at $1.29 and $1.35, respectively.

Price Movement

In the last twelve months, CenterPoint Energy’s shares returned 34.4%, outperforming the Zacks categorized Utility – Electric Power industry’s decline of 1.2%.

Ongoing economic development in the company’s operating territories primarily boosted the customer count. This trend is expected to continue in the future given the economic recovery in Houston, which will subsequently boost utility demand.

Zacks Rank & Other Picks

CenterPoint Energy currently has a Zacks Rank #2 (Buy). Other stocks in the same space are TransAlta Corporation TAC, Pampa Energia S.A. PAM, and RWE Aktiengesellschaft RWEOY. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

TransAlta Corporation reported a positive earnings surprise of 85.7% in the previous quarter. The 2017 Zacks Consensus Estimate for the company moved up by 40.0% to 14 cents per share in the last 60 days.

Pampa Energia’s 2017 Zacks Consensus Estimate moved up by 133.7% to $3.81 per share in the last 60 days.

RWE Aktiengesellschaft’s 2017 Zacks Consensus Estimate moved up by 20.0% to $1.62 per share in the last 60 days.

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CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report
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