Valued at a market cap of $26.9 billion, PPL Corporation (PPL) is a diversified utility holding company that provides electricity and natural gas to millions of customers in the U.S. The Allentown, Pennsylvania-based company’s principal subsidiaries are Louisville Gas and Electric Company (LG&E), Kentucky Utilities Company (KU), and PPL Electric Utilities Corporation.
This utility company has outpaced the broader market over the past 52 weeks. Shares of PPL have rallied 24.9% over this time frame, while the broader S&P 500 Index ($SPX) has gained 9.2%. Moreover, on a YTD basis, the stock is up 9.7%, compared to SPX’s 3.7% downtick.
Zooming in further, PPL has also outperformed the Utilities Select Sector SPDR Fund’s (XLU) 14% uptick over the past 52 weeks and 5.8% rise on a YTD basis.
On Apr. 30, shares of PPL closed up marginally after its better-than-expected Q1 earnings release. The company’s operating revenue grew 8.7% year-over-year to $2.5 billion, beating analyst expectations by 4.6%. Moreover, driven by stronger performance in its Kentucky and Pennsylvania segments, its overall earnings from ongoing operations rose 11.1% from the same quarter last year to $0.60 per share and came in 13.2% above Wall Street estimates. A key contributor to the robust results was a 6.6% year-over-year increase in electricity sales to 18,386 GWh, supported by strong growth in both retail and wholesale markets. Looking ahead to fiscal 2025, PPL reaffirmed its ongoing earnings expectations to be between $1.75 and $1.87 per share.
For the current fiscal year, ending in December, analysts expect PPL’s EPS to grow 7.7% year over year to $1.82. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 15 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on 10 “Strong Buy,” one “Moderate Buy,” and four “Hold” ratings.
The configuration has remained consistent over the past three months.
On May 7, Argus analyst Marie Ferguson maintained a “Buy” rating on PPL and set a price target of $40, the Street-high price target, which indicates a 12.3% potential upside from the current levels.
The mean price target of $38.33 represents a 7.6% potential upside from PPL’s current price levels.
