Cayce, South Carolina–based SCANA Corporation (SCG) abandoned its V.C. Summer Nuclear Station in July 2017 after the project’s cost swelled beyond $20 billion. SCANA stock has tumbled 39% since then.
SCANA’s troubles were magnified after the US attorney’s office in South Carolina began a criminal investigation into the utility related to the rate recovery of the V.C. Summer Nuclear Station.
SCANA stock is presently trading at a cheaper valuation than both its historical average and its peer average. On December 20, 2017, SCANA was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 8.0x. Its five-year historical average multiple is 10.0x. On average, utilities (XLU) (VPU) are now trading at an EV-to-EBITDA multiple of ~11x.
SCANA’s epic slide this year has resulted in its cheaper valuation. However, investors might end up shunning the stock despite its cheaper valuation due to uncertainties surrounding SCANA’s abandonment of its power plant and the ongoing criminal probe.
To learn more, read SCANA’s Nuclear Mess Continues to Push the Stock Down.
According to Wall Street analysts’ estimates, SCANA stock is expected to rise 15% over the next 12 months. It has a mean price target of $44.4 compared to its current market price of $41.3.
Among the ten analysts tracking SCANA, one analyst recommends a “strong buy” on the stock, while none have “buy” recommendations on the stock. Seven analysts rate the stock as a “hold,” and one analyst recommends a “sell,” while one recommends a “strong sell” as of December 21, 2017.
For more information, check out Institutional Activity in the Top S&P 500 Utilities in 3Q17.