uploads/2019/03/PPL.jpg

How PPL Stock Is Currently Valued Compared to Its Peers

By

Updated

PPL Corporation

PPL Corporation (PPL) is trading at a dividend yield of 5.1%, one of the highest among utilities. The stock has risen ~15% so far this year, outperforming broader utilities (XLU).

Analysts have given PPL a median target price of $31.58, which implies a potential downside of more than 3% over the next 12 months.

PPL

Currently, PPL is trading at $32.59. Among the 15 analysts tracking PPL who have been surveyed by Reuters, two have given it “strong buys,” two have given it “buys,” eight have given it “holds,” and two have given it “sells.” Morgan Stanley recently cut PPL’s target price from $31.0 to $30.0.

Article continues below advertisement

Valuation

PPL’s valuation looks attractive compared to its historical valuation and its peer average. It’s trading at a forward PE ratio of 13.3x based on analysts’ EPS estimates for 2019. The stock looks to be trading at a discounted valuation given broader utilities’ (XLU) average valuation of close to 18x. PPL’s five-year historical average valuation is ~14x.

Xcel Energy (XEL), PPL’s peer and a regulated utility, is trading at a forward PE multiple of 21x—higher than its five-year historical average.

The median target price for Xcel Energy is $54.42, implying a ~3% potential downside compared to its current price of $56.16.

Advertisement

More From Market Realist