Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 12 Feb, 25 | EVRG | Buy | USD 66.22 | USD 70.0 | USD 74.0 | 50 days | 11.7% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.
Strong Earnings Growth – Evergy’s Q3 2024 GAAP EPS increased by 32% to $2.02, compared to $1.53 in Q3 2023, demonstrating solid financial performance.
Capital Investment Commitment – The company announced a $16.2 billion capital investment plan for 2025-2029, reflecting a strong commitment to infrastructure development and future growth.
Impact of Cooler Weather – Weather-related factors negatively affected revenue, as cooler summer temperatures led to lower electricity demand compared to expectations.
Higher Depreciation and Amortization Costs – Increased capital expenditures led to higher depreciation and amortization expenses, which partially offset earnings growth.
Evergy faces key investment risks including regulatory uncertainties, fluctuations in electricity demand due to weather variability, rising operational and maintenance costs, and potential challenges in executing its $16.2 billion capital investment plan efficiently.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 66.22 | 58.0 | 70.0 | 74.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Financial Performance in Q3 2024: Evergy, Inc. (NASDAQ: EVRG) reported robust financial results for the third quarter of 2024, with GAAP earnings of $465.6 million, or $2.02 per share, compared to $351.6 million, or $1.53 per share, in the same period of 2023. Adjusted earnings (non-GAAP) also improved, reaching $465.6 million, or $2.02 per share, compared to $432.3 million, or $1.88 per share, in Q3 2023. The increase in earnings was primarily driven by new retail rates, investments in FERC-regulated infrastructure, and growth in weather-normalized demand, partially offset by cooler summer temperatures and higher depreciation and amortization expenses.
Dividend Increase and Capital Investment Plan: The company’s Board of Directors approved a 4% increase in the quarterly dividend, raising it to $0.6675 per share, payable on December 20, 2024, to shareholders of record as of November 21, 2024. In addition, Evergy introduced a five-year capital investment plan (2025-2029) totaling $16.2 billion, aimed at modernizing the energy grid, expanding transmission and distribution networks, and integrating new generation capacity to support regional economic growth.
Regulatory Developments and Infrastructure Expansion: Evergy announced a unanimous settlement agreement in its Missouri West rate case, which, if approved by the Missouri Public Service Commission (MPSC), is expected to provide a constructive outcome for customers. Additionally, the company disclosed plans to construct two 705-megawatt combined-cycle natural gas plants to meet increasing energy demand in Kansas and Missouri. These projects are anticipated to create new jobs, generate tax revenue, and attract further business investment to the region.
Earnings Guidance and Growth Expectations: The company reaffirmed its 2024 GAAP and adjusted EPS guidance range of $3.73 to $3.93 per share and established its 2025 GAAP and adjusted EPS guidance range at $3.92 to $4.12 per share. Evergy also set a long-term adjusted EPS annual growth target of 4% to 6% through 2029, based on the 2025 adjusted EPS midpoint of $4.02. The company expects earnings growth to trend toward the upper half of this range beginning in 2026.
Earnings Call and Investor Engagement: Evergy’s management team will host a conference call on November 7, 2024, at 9:00 a.m. ET (8:00 a.m. CT) to discuss third-quarter results and provide further insights into the company’s strategic initiatives. Investors and analysts can access the webcast and accompanying presentation slides through investors.evergy.com. A package of detailed financial information, including the company's quarterly report on Form 10-Q, is also available on Evergy’s investor relations website.
Commitment to Reliable and Sustainable Energy: Evergy remains committed to delivering affordable, reliable, and sustainable energy to its customers. The company's $16.2 billion capital investment plan includes key projects to modernize its infrastructure, support energy transition efforts, and maintain system reliability. By balancing financial strength with long-term investment in energy infrastructure, Evergy aims to position itself as a leader in the evolving energy landscape.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Evergy, Inc (NASDAQ: EVRG) at the closing price of USD 66.22, as on February 11, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Utilities Industry: Utilities - Regulated Electric
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| EVRG Evergy, Inc. |
-0.25 0.37% | 68.11 | 17.35 | 13.30 | 2.13 | 1.21 | 4.51 | 10.27 |
| NEE Nextera Energy Inc |
0.63 0.95% | 67.27 | 15.77 | 17.61 | 4.52 | 2.61 | 7.10 | 12.28 |
| SO Southern Company |
-0.73 0.79% | 91.13 | 25.35 | 17.76 | 2.89 | 2.48 | 5.27 | 13.35 |
| DUK Duke Energy Corporation |
-1.11 0.91% | 121.42 | 20.54 | 16.34 | 2.60 | 1.59 | 5.34 | 11.98 |
| AEP American Electric Power Co Inc |
-1.13 1.04% | 107.02 | 19.17 | 16.18 | 2.58 | 1.91 | 4.83 | 12.39 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 11,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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