BofA Securities analyst Ross Fowler has taken a fresh look at four US utilities in the Great Plains, providing updated ratings for each company. He has reinstated a Buy rating for both Evergy, Inc. (EVRG) and MDU Resources Group, Inc. (MDU). Meanwhile, Fowler has issued a Neutral rating for OGE Energy Corp (OGE) and an Underperform rating for Black Hills Corporation (BKH).
Fowler’s assessment of EVRG is positive, citing a Buy rating with a price target of $66. Despite trading at a 10% discount to its peers based on 2026E P/E, the analyst believes Evergy is undervalued. This optimism stems from the improving regulatory environment in Kansas, which supports higher rate base growth. Fowler anticipates strong EPS growth, projecting $3.86, $4.09, and $4.30 for FY24, FY25, and FY26, respectively, all exceeding consensus estimates.
MDU also received a Buy rating from Fowler, with a price target of $28. He considers the current 15% discount to the electric utility peer group unjustified, given MDU’s transition to a pure-play regulated utility and pipeline operator. The company’s projected 6-8% EPS growth rate through the planning period is another key factor in his bullish outlook. Although MDU’s multi-jurisdictional presence may cause some delays in regulatory approvals, Fowler expects sustained support for earned ROEs in the electric utility sector, driven by strong demand for data center customer connections in areas experiencing transmission congestion.
OGE Energy Corp received a Neutral rating from Fowler, with a $40 price target. While acknowledging OGE’s strong execution and growth potential fueled by data center and crypto-mining load, the analyst notes that the challenging regulatory environment in Oklahoma and significant capital investments required for resource adequacy pose risks. Fowler forecasts EPS estimates of $2.14, $2.28, and $2.43 for FY24, FY25, and FY26, respectively, aligning with consensus estimates.
Black Hills Corporation, on the other hand, received an Underperform rating from Fowler, with a $59 price target. While the company’s electric utility operations are poised for growth, driven by increasing residential, commercial, and data center load, Fowler identifies a potential headwind in the form of $1.6 billion in debt maturities from 2023 to 2028. This could create a ~$0.50 EPS headwind, particularly given BKH’s already low 4-6% target EPS CAGR. Fowler projects EPS estimates of $3.88, $4.13, and $4.35 for FY24, FY25, and FY26, falling below consensus estimates of $3.92, $4.14, and $4.40, respectively.
