Dominion Energy’ target price
According to Wall Street analysts’ consensus, Dominion Energy (D), one of the largest utility companies in the country, has a potential gain of ~4%. It has a price target of $79.56. Currently, it’s trading at $76.77.
Analysts seem to be positive on Dominion Energy stock. On July 24, 2017, none of the 19 analysts tracking Dominion had a “sell” recommendation on the stock. While 13 analysts recommend it as a “hold,” four recommend its as a “buy” and two recommend it as a “strong buy.”
Are its peers attractive?
Florida-based NextEra Energy (NEE), the biggest utility stock in the S&P 500 Utilities Index, has an estimated gain of 4%. It has a target price of $149.08—compared to its current market price of $143.15.
The second-largest utility by market capitalization in the country, Duke Energy (DUK) is expected to have flattish movement going forward. It’s trading at a market price of $84.55. Wall Street analysts’ consensus has given it a price target of $84.75.
Dominion Energy looks well placed to achieve twice the industry’s average earnings growth. Its relatively higher exposure to regulated operations compared to competitive operations is expected to bode well for long-term earnings growth. Also, its increased focus on renewables, midstream, and gas operations might achieve the aggressively targeted earnings growth.
Among the top utilities by market cap in the sector, Southern Company (SO) and Duke Energy are aiming to follow the industry’s average earnings growth. NextEra Energy is aiming for annual growth of ~8%. Due to relatively higher earnings, their dividend growth might also be intimidating for peers going forward.
US utility stocks (XLU) were trembling recently due to concerns about their premium valuation and increasing interest rates. To learn more about where they could end up in the short term, read US Utilities: Ongoing Weakness Could Be Temporary.