CenterPoint Energy, Inc. (CNP), headquartered in Houston, Texas, engages in the business of power generation and distribution. Valued at $20.9 billion by market cap, the company conducts activities in electricity transmission and distribution, natural gas distribution, interstate pipeline and gathering operations, and power generation.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CNP definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the regulated electric utilities industry. CNP's commitment towards lowering its carbon footprint and its emphasis on providing a diversified portfolio, favorable regulatory environment, and its strategic infrastructure investments work to its advantage.
Despite its notable strength, CNP slipped 2.8% from its 52-week high of $33, achieved on Dec. 3. Over the past three months, CNP stock fell 13.7%, outperforming the Utilities Select Sector SPDR Fund ETF’s (XLU) 2.7% losses during the same time frame.
In the longer term, shares of CNP rose 12.3% on a YTD basis and climbed 11.1% over the past 52 weeks, underperforming XLU’s YTD gains of 21.6% and 20.4% returns over the last year.
To confirm the bullish trend, CNP has been trading above its 50-day moving average since mid-September, with slight fluctuations. The stock has mostly traded above its 200-day moving average since late September.
CNP’s underperformance was largely due to significant disruptions caused by Hurricane Beryl, resulting in extensive power outages and delayed restoration efforts that hindered the company's market momentum.
On Oct. 28, CNP shares closed up by 1.5% after reporting its Q3 results. Its adjusted EPS of $0.31 missed Wall Street expectations of $0.36. The company’s revenue was $1.86 billion, failing to meet Wall Street forecasts of $1.88 billion. CNP expects full-year adjusted EPS to be between $1.61 and $1.63.
In the competitive arena of regulated electric utilities, Public Service Enterprise Group Incorporated (PEG) has taken the lead over CNP, showing resilience with a 40.7% uptick on a YTD basis and solid 39.8% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on CNP’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $32.36 suggests a potential marginal upside from current price levels.
