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No Analysts Recommend a “Sell” on Xcel Energy

Vineet Kulkarni - Author
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Dec. 4 2020, Updated 10:52 a.m. ET

Price targets

According to Wall Street analysts’ estimates, Xcel Energy (XEL) has a one-year median price target of $37.6 against its current market price of $36. This amounts to a possible upside of 4.4%. Of the 18 analysts tracking XEL, 13 recommend it as a “hold,” while five recommend it as a “buy.” No analysts recommend XEL as a “sell” as of January 22, 2016.

As for XEL’s peers, Duke Energy (DUK) has a one-year estimated upside of 7%, according to analyst estimates. It has a price target of $75.9 against its current market price of $71. Another utility (IDU) giant, NextEra Energy (NEE), has an estimated price target of $117.6. This amounts to a possible upside of 12%. NEE is currently trading at $105.

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Outlook

Xcel Energy’s ambitious 4%–6% growth plan is backed by its heavy capital spending plan. It’s planning to spend $15 billion in the next five years. Most of this capital has been allocated to its transmission and distribution segment in order to improve its operational efficiency.

XEL also plans to add solar (TAN) and wind (FAN) power generation assets to its current portfolio, as it’s aiming to reduce its carbon emissions by 60% from 2005 levels by 2030. XEL is looking to hike its rates in order to achieve 50 basis points of growth in return on equity on its regulated operations through 2018. It’s currently earning a return of nearly 10%.

Xcel Energy has a dividend growth objective of 5%–7% annually, with a target dividend payout range of 60%–70%. In 2015, Xcel Energy paid $1.28 per share in dividends.

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