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What Centerpoint Energy Has in Store for Its Investors

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Sep. 9 2016, Updated 9:04 a.m. ET

CenterPoint Energy’s price targets

According to Wall Street analysts’ estimates, CenterPoint Energy (CNP) has a one-year median price target of $24.50 compared to its current market price of $22.43. This implies a possible upside of 9.3%.

Of the 16 analysts tracking CenterPoint Energy, 13 have recommended a “hold,” and three have recommended a “buy.” None of the analysts have recommended a “sell” as of August 31, 2016.

For its peers, analysts gave DTE Energy (DTE) a one-year price target of $102. That implies an estimated upside of 11%, considering its current market price of $92.20. Eversource Energy (ES) has an estimated upside of 14% with a price target of $61 against its current market price of $53.60.

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CenterPoint Energy in the long term

CenterPoint Energy (CNP) management has provided earnings guidance of $1.12–$1.20 per share for 2016. It expects earnings to increase by 4%–6% through 2018, inclusive of its midstream investment. The guidance includes an expected earnings contribution of $0.88–$0.92 per share from its utility operations.

CenterPoint Energy’s intention to sell its stake in Enable Midstream Partners is a welcome move. The fall in distributions from Enable Midstream Partners (ENBL) was the main driver of CenterPoint Energy’s declining earnings in 2015.

On a positive note, its impressive yield is likely to make an appealing investment option for conservative investors.

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