With a market cap of around $31 billion, WEC Energy Group, Inc. (WEC) is a diversified energy company providing regulated natural gas and electricity, as well as renewable energy services across the United States. The Milwaukee, Wisconsin-based company operates extensive infrastructure, including power generation from diverse energy sources and natural gas distribution.
Shares of the electricity and natural gas provider have underperformed the broader market over the past 52 weeks. WEC stock has risen 20.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 30.4%. In 2024, shares of WEC are up 16.4%, compared to SPX's 23.1% gain on a YTD basis.
Looking closer, WEC has also lagged behind the Utilities Select Sector SPDR Fund's (XLU) 27% return over the past 52 weeks and a 24.9% YTD gain.
Despite beating Q3 adjusted EPS expectations with $0.82, WEC Energy's shares fell marginally on Oct. 31 as revenue of $1.9 billion missed the analysts' estimate and declined 4.8% year-over-year, signaling top-line pressure. Total electric sales volume dropped 5.2%, raising concerns about demand weakness, particularly among large commercial and industrial customers. Additionally, a notable 18% decline in earnings from the prior-year quarter and a 12.1% rise in interest expenses highlighted ongoing cost pressures.
For the current fiscal year, ending in December, analysts expect WEC's EPS to grow 5.2% year-over-year to $4.87. The company's earnings surprise history is promising. It beat or met the consensus estimates in the last four quarters.
Among the 17 analysts covering the stock, the consensus rating is a “Hold.” That’s based on four “Strong Buy” ratings, 10 “Holds,” one “Moderate Sell,” and two “Strong Sells.”
On Nov. 8, Argus analyst Marie Ferguson raised WEC Energy's price target to $105 and maintained a “Buy" rating, citing the company's 2024 guidance, anticipated earnings improvement, favorable regulatory environment, and significant renewable energy investments.
As of writing, WEC is trading above the mean price target of $97.37. The Street-high price target of $108 implies a potential upside of 10.2%.
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