SCANA’s operations are well diversified with both gas and electricity distribution. The electric business has shown very trivial growth over the last couple of years. In such a scenario, SCANA’s natural gas business may continue to grow in the near future. The natural gas (UNG) business accounts for nearly 30% of SCANA’s total revenues.
Prolonged lower natural gas prices may continue to benefit SCANA. Its power stations are mainly fired by coal, but it is shifting its fuel mix from coal to nuclear. SCANA’s management has provided GAAP-adjusted earnings guidance of $3.90 to $4.10 per share for 2016. Management expects an earnings increase of 4-6% in the next three years. The chart below shows the price targets given by various analysts for SCANA.
According to Wall Street analysts, SCANA (SCG) has a median price target of $63, which implies a possible downside of 4.3% in one year against its current market price of $65.80.
Of the 12 analysts tracking SCG, six recommend it as a “hold” while five recommend it as a “buy.” One analyst has a sell recommendation on SCG as of February 19, 2016.
Sempra Energy (SRE), another Californian utility (JXI), has a price target of $116.70 against its current market price of $95. This target price indicates a possible upside of 23% in one year. Edison International (EIX) has an estimated upside of ~4% with a price target of $66. EIX is currently trading at $63.70.