Saint Louis, Missouri-based Ameren Corporation (AEE) is a public utility holding company that generates, transmits, and distributes rate-regulated electricity and natural gas. Valued at a market cap of $27.4 billion, the company generates electricity through coal, nuclear, and natural gas, as well as renewable energy sources, including hydroelectric, wind, methane gas, and solar.
This utility company has outpaced the broader market over the past 52 weeks. Shares of AEE have soared 26.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 19.3%. Moreover, the stock is up 13.7% on a YTD basis, compared to SPX’s 8.4% rise.
Zooming in further, Ameren has also surged past the Utilities Select Sector SPDR Fund’s (XLU) 16.7% uptick over the past 52 weeks and 13.5% return on a YTD basis.
Ameren delivered better-than-expected Q2 results on Jul. 31, and its shares closed up almost 1% on the following day. The company reported total operating revenue of $2.2 billion, up by a notable 31.2% from the year-ago quarter, with its core electric sales rising by 34% annually. The top-line figure surpassed the consensus estimates by 20.7%. Moreover, on the earnings front, its adjusted EPS of $1.01 improved 4.1% from the same period last year, topping analyst estimates by a penny.
For the current fiscal year, ending in December, analysts expect AEE’s EPS to grow 6.7% year over year to $4.94. The company’s earnings surprise history is disappointing. It missed the consensus estimates in three of the last three quarters, while surpassing on another occasion.
Among the 14 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on eight “Strong Buy,” and six “Hold” ratings.
This configuration is less bullish than two months ago, with nine analysts suggesting a “Strong Buy” rating, and one recommending “Strong Sell.”
On Aug. 4, Anthony Crowdell from Mizuho Financial Group, Inc. (MFG) maintained a "Buy" rating on AEE with a price target of $108, implying a 6.6% potential upside from the current levels.
The mean price target of $106.54 represents a 5.1% premium from AEE’s current price levels, while the Street-high price target of $115 suggests an upside potential of 13.5%.
