Yahoo Finance WEC Energy Stock Rides on Investments & Focus on Clean Energy
WEC Energy Groupâs WEC ongoing investments in infrastructure projects and focus on clean energy should further drive its overall performance. The company continues to expand operations through strategic acquisitions.
However, this currently Zacks Rank #3 (Hold) company faces risks related to increased competition in the electric and natural gas markets.
WECâs Tailwinds
WEC Energy is gaining on the back of improving demand from large and small commercial and industrial (C&I) customers, as well as that from the residential space. On average, more than 60% of the companyâs electricity is sold to the C&I group. Hence, the improving demand from this group should boost WEC Energyâs performance.
Courtesy of the contribution from organic and inorganic assets, WEC Energy expects compound earnings growth of 6.5-7% through 2028. Based on improving conditions in the companyâs service area, it continues to witness an uptick in customer volumes. For the Wisconsin segment, WEC expects weather-normalized electric sales to increase 4.5-5% and gas sales to grow 0.7-1% year over year during 2026-2028.
During 2024-2028, it plans to invest $23.7 billion, out of which $7 billion will be allotted for regulated renewable projects. The idea is to further strengthen WEC Energyâs renewable portfolio. During 2024-2028, WEC plans to build and own nearly 3.8 gigawatts.
Headwinds for WEC
WEC Energyâs ability to obtain and retain customers, including wholesale customers, due to increased competition in its electric and natural gas markets from retail choice and alternative electric suppliers and continued industry consolidation is a concern.
The companyâs operations are subject to significant state, local and federal governmental regulations, which may affect WEC Energyâs ability to recover costs from utility customers.
Recent WEC Stock Performance
In the past three months, shares of the company have risen 14.6% compared with the industryâs 3.8% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry are OGE Energy OGE, NiSource Inc. NI and TransAlta TAC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of todayâs Zacks #1 Rank (Strong Buy) stocks here.
OGEâs long-term (three-to-five-year) earnings growth rate is 5%. The Zacks Consensus Estimate for OGEâs 2024 EPS indicates an increase of 3.4% from the previous yearâs reported number.
NiSourceâs long-term earnings growth rate is 6%. The Zacks Consensus Estimate for NIâs 2024 EPS implies an improvement of 7.5% from that recorded in 2023.
The Zacks Consensus Estimate for TACâs 2024 EPS implies a year-over-year decrease of 52.2%. The company delivered an average earnings surprise of 98% in the past four quarters.
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