BUZZ-KeyBanc remains positive on US utility sector despite 2025 macro trends concerns

Reuters2024-12-05
BUZZ-KeyBanc remains positive on US utility sector despite 2025 macro trends concerns

** KeyBanc Capital Markets says it remains positive for utilities in 2025, but sees some headwinds for the sector

** Brokerage concerned with "inflation stagnating at above-target levels and potentially accelerating from here due to widely inflationary policies favored by the incoming administration"

** However, KeyBanc expects the load growth trend, driven by the data economy and reshoring of manufacturing, to offset these headwinds

** Expects regulatory risk to remain subdued in 2025, with states like Oregon, Texas, Ohio and Arizona, offering potential catalysts for incumbent utilities

** KeyBanc adds FERC proceedings will "continue to draw investor attention during 2025, particularly as the tension between nuclear operators and independent power producers continues to mount"

** Brokerage downgrades DTE Energy DTE.N and Entergy ETR.N to "sector weight"; upgrades Pinnacle West PNW.N to "overweight"

KeyBanc changes PT on the following firms:

Company

New PT

Old PT

Upside to stock's last close

FirstEnergy FE.N

$47

$48

14%

WEC Energy WEC.N

$109

$108

11%

Xcel Energy XEL.O

$79

$74

11%

Portland Electric POR.N

$51

$52

8%

Pinnacle West PNW.N

$101

NA

11%

(Reporting by Pooja Menon in Bengaluru)

((Pooja.Menon@thomsonreuters.com;))

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