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Xcel Energy (XEL) Strong on Capex and Clean Energy Plans

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·3 min read
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  • XEL
  • DTY
  • DUK

Xcel Energy Inc.’s XEL planned investments in enhancing its clean-energy generation capacity and infrastructure along with a consistent rise in its existing natural gas and electric customer base are its key catalysts.

In the past six months, shares of this currently Zacks Rank #3 (Hold) Xcel Energy have lost 10.7% against the industry’s growth of 1.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Six Months’ Price Performance

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2021 and 2022 earnings is pegged at $2.98 and $3.17 per share each, indicating respective growth of 6.81% and 6.31% from the corresponding year-ago reported figures. Additionally, Xcel Energy’s long-term (three-five years) earnings growth rate stands at 6.36%.

Tailwinds

Xcel Energy continues to invest substantially in its utility assets and renewable projects, which will not only increase the reliability of its services but also help meet rising electricity demand, effectively. These investments are aimed to strengthen and expand its transmission, distribution, electric generation and renewable projects.

XEL is focusing on transition to clean energy. In 2019, the subsidiary NSP-Minnesota filed its Minnesota resource plan, which runs through 2034. It reached 51% carbon reduction in June 2021. Per this plan, XEL aims to achieve 85% carbon reduction and completely exit the usage of coal by 2030, and overall plans to generate 100% carbon-free electricity by 2050.

Other electric utilities are also adopting measures to supply clean and reliable energy to their customers, namely, Duke Energy DUK, DTE Energy DTE and Alliant Energy LNT. While DUK and DTE carry a Zacks Rank#3 at present, LNT holds a Zacks Rank#2 (Buy). All three stocks are planning to provide absolute clean energy by 2050.

DTE Energy remains committed to reduce carbon emissions of its electric utility operations by 32% within 2023, 50% by 2030 and 80% by 2040 from the 2005 carbon emissions levels. Duke Energy plans to reduce carbon footprint between approximately 55% and 75% through 2035. Alliant Energy targets to retire all the existing coal-fired generation units by 2040 with an objective of lowering emissions from the 2005 baseline by 50% within 2030.

Xcel Energy has liquidity worth $2,871 million as of Oct 26, which is sufficient to fulfill its near-term obligations.

Headwinds

XEL’s natural gas transmission and distribution operations are exposed to several risks with leaks and mechanical setbacks impacting its normal operations. Also, XEL’s business activities are susceptible to cyber security hazards, which might induce valuable data loss. It is subject to comprehensive environmental guidelines too, which could shoot up its operating costs.


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Xcel Energy Inc. (XEL) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

DTE Energy Company (DTE) : Free Stock Analysis Report

Alliant Energy Corporation (LNT) : Free Stock Analysis Report

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