Jackson, Michigan-based CMS Energy Corporation (CMS) operates as an energy utilities company. With a market cap of $20.5 billion, CMS Energy operates through the Electric Utility, Gas Utility, and Enterprises segment, providing electricity and natural gas to millions of residents in Michigan.
The utilities major has lagged behind the broader market over the past year. CMS Energy’s stock prices have gained 18% in 2024 and 19.9% over the past 52 weeks compared to the S&P 500 Index’s ($SPX) 24.1% gains on a YTD basis and 30.1% returns over the past year.
Narrowing the focus, CMS Energy has also lagged behind the Utilities Select Sector SPDR Fund’s (XLU) surge of 27.1% in 2024 and 29.6% over the past 52 weeks.
CMS stock price experienced a marginal dip after the release of its Q3 earnings on Oct. 31 as the company’s operating revenues of $1.7 billion fell below analysts’ topline expectations by 4.9% which unsettled investors’ confidence. Nevertheless, the company registered a 4.2% topline growth compared to the year-ago quarter. The company also showcased impressive growth in profitability, reporting a massive 41% year-over-year surge in adjusted net income, reaching $251 million. Moreover, its adjusted EPS of $0.84 surpassed analysts’ bottom-line estimates by a notable 7.7%.
CMS Energy has continued investments in burying wires, installing sensors and adding other technology to build a smarter and stronger grid as outlined in its electric Reliability Roadmap announced earlier this year, the five-year plan which set an ambitious target to ensure no customer is without power for more than a day and to prevent outages from affecting thousands of customers, has demonstrated its commitment towards customers. Meanwhile, the company has reaffirmed its full-year adjusted EPS guidance of $3.29 to $3.35, showcasing its confidence in the company's operations.
For the current fiscal year, ending in December, analysts expect CMS to report a 7.1% year-over-year growth in adjusted EPS to $3.33. Moreover, the company has a robust earnings surprise history. It has surpassed analysts’ earnings estimates in each of the past four quarters.
CMS stock has a consensus “Moderate Buy” rating overall. Out of the 17 analysts covering the stock, 10 recommend “Strong Buy,” and seven suggest a “Hold” rating.
This configuration is slightly more bullish than a month ago, when nine analysts recommended a “Strong Buy” rating.
On Nov. 1, BMO Capital analyst James Thalacker maintained an “Outperform” rating on CMS with a price target of $76, representing a premium of 10.9% to current price levels.
The mean price target of $73.47 suggests a potential upside of 7.2%. Meanwhile, the Street-high target of $81 represents a premium of 18.2% to current price levels.
