Pennsylvania-based PPL Corporation (PPL) has a mean price target of $32.2 compared to its current market price of $27.7. This difference reflects an implied gain of more than 16% over the next 12 months.
Among the 14 analysts tracking PPL, six have recommended “holds” on its stock, while two have recommended “strong buys,” five have recommended “buys,” and one has recommended a “sell” on its stock.
Peers’ price targets
Peer Xcel Energy (XEL) has an estimated upside potential of more than 6% for the next year. Analysts have given it a mean price target of $47.83 against its current market price of $45.0.
Georgia-based Southern Company (SO) has a mean target price of $46.83, which implies a potential gain of 5%. Currently, Southern Company is trading at $44.55.
On May 14, PPL was trading at a PE (price-to-earnings multiple) of 13.5x compared to its five-year historical average PE of near 14x. PPL seems to be trading at a discounted valuation to its historical multiple and the industry average.
PPL stock was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of near 10.5x on May 14. Its five-year historical average and the industry (XLU) average were both near 11x on the day.
Xcel Energy is trading at a PE of 20x against its historical average valuation of 18x. Thus, it seems to be trading at a premium valuation to its historical average.