Based in Houston, Texas, CenterPoint Energy, Inc. (CNP) is a public utility holding company that provides electric transmission & distribution, natural gas distribution, and competitive natural gas sales and services operations. Valued at a market cap of $18.1 billion, the company’s important subsidiaries include Houston Electric, CERC Corp., and Vectren.
Companies valued at $10 billion or more are generally described as “large-cap” stocks, and CenterPoint Energy fits this criterion perfectly. The company serves more than seven million metered customers and owns approximately 348 substations. It is renowned for its reliability, sustainability, and emergency preparedness. It runs annual drills to prepare for major weather events and educates operations leaders about emergency response methods.
Shares of CNP are trading 11.5% below their 52-week high of $31.57, which they reached on Jun. 21. The stock has declined 10.7% over the past three months, significantly lagging behind the Utilities Select Sector SPDR Fund’s (XLU) 13.5% gain over the same time frame.
In the longer term, CNP stock is down 2.2% on a YTD basis, lagging behind XLU’s 25.1% gains. Moreover, shares of CNP have declined 3% over the past 52 weeks, underperforming XLU’s 23.6% returns over the same time frame.
To confirm its bearish trend, CNP has been trading below its 200-day moving average since late July. However, has remained above its 50-day moving average since mid-September.
CNP has been underperforming due to the repercussions of Hurricane Beryl and the associated political and regulatory challenges the company is facing.
On Jul. 30, shares of CNP fell 2.3% after its Q2 earnings release. The company reported a net income of $228 million, or $0.36 per share, which surpassed Wall Street's expectations of $0.33 per share. Moreover, the company's revenue of $1.91 billion exceeded analysts’ estimates of $1.88 billion.
CNP has also lagged behind its rival, DTE Energy Company (DTE), which gained 16.6% over the past 52 weeks and 12.8% on a YTD basis.
Because of CNP's recent underperformance, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from 14 analysts in coverage, and the mean price target of $29.67 suggests a premium of 5.8% to its current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
