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Assessing Analysts’ Views and Price Targets on Utility Giants

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Analyst price targets

According to Wall Street analysts’ consensus, NextEra Energy (NEE), the most rallied stock among the top utilities, has an upside potential of nearly 5% for the next 12 months. It has a mean price target of $161.9 compared to its current market price of $154.5.

Duke Energy (DUK), the largest rate-regulated utility, has a mean price target of $88.5, which implies a potential rise of more than 5% over the next year. The stock is currently trading at $84.2.

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The chart above shows how Wall Street analysts have rated top utilities as of December 26, 2017.

Wall Street analysts have given Dominion Energy (D) stock a mean price target of $82.6. This indicates a possible rise of nearly 3% from its current price of $80.4.

Southern Company (SO) has a mean price target of $51.9 compared to its current market price of $48.5. This implies a potential rise of 7% going forward.

Credit Suisse cut Southern Company’s price target to $51.0 from $52.0 on December 22, 2017.

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Outlook

Lower tax rates aren’t expected to have a noticeable impact on utilities. However, utilities have already witnessed a notable fall, likely driven by their concerning valuations.

US utilities (XLU) continue to look strong fundamentally, considering their earnings growth and balance sheet positions. Their strong earnings growth could facilitate handsome dividend growth over the next few years.

Noted that superior dividend yields, which were key to utilities’ rally in 2017, could continue to be a focal point for investors next year.

To know more, read An Investor’s Guide: A Look at the 10 Largest S&P 500 Utilities.

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