AI is everywhere and certainly available to help with portfolio management, which is where Evergy Energy (NASDAQ: EVRG) comes into the picture. Evergy Energy isn’t an AI-powered tool so much as the power behind AI and a way for income investors to gain exposure to it. It is an electrical utility, situated alongside and serving the greater Kansas City region, on both sides of the border.
That’s a critical location, as numerous hyperscalers, including Alphabet (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), and NVIDIA-backed (NASDAQ: NVDA) Lambda, operate there. They account for $100s of millions in data center projects and an estimated 15 GW in capacity that has yet to appear in the guidance.
Analysts Drive EVRG Market as AI Demand Inflates Outlook
The analyst trends for EVRG stock are strong, including a recent update from Gabelli Funds. They highlighted several utilities well-positioned to benefit from AI, including Evergy Energy. They cite the project backlog as a tailwind for sentiment, likely causing a bullish upgrade cycle in revenue and earnings forecasts that spills over into ratings and stock price targets. As it stands, the 15 GW in project capacity only requires budgetary approvals, which are expected in the coming weeks and months.
The analysts’ data tracked by MarketBeat shows that coverage of this stock has increased significantly over the past 12 months, sentiment is firming, with 10 of 11 ratings pegged at Buy, and the consensus target price is trending higher. Forecasting a 10% upside in mid-December, the high-range suggests a 25% upside is possible and may be increased in 2026 as revenue and earnings targets swell. The forecast in mid-December is for nearly 4% revenue growth in F2025 and a mild acceleration in 2026 and 2027. Critical details include profitability, incremental margin expansion, and free cash flow dividends.
Dividends are a key factor in the appeal of this stock to income investors. It pays an annualized $2.78 in 2025, yielding approximately 3.75% as of December, and the distribution is expected to increase annually. The company has increased for 22 consecutive years, putting it on track for inclusion in the Dividend Aristocrat Index, scheduled for 2029. Until then, the payout ratio is running at a sustainable 70%, with distribution growth tracking earnings growth.
Institutions and Short Sellers Create Q4 Headwinds for EVRG
Although the outlook and analysts' trends are strong, institutions and short-sellers pose a headwind that capped gains in Q4. Institutions, which own 87% of the stock, sold on balance, and short interest increased. The short interest isn’t astronomically high, but it is sufficient to overpower bullish activity with institutions selling and an excuse for profit-taking emerging in the Q3 release. Evergy’s guidance range was narrowed, putting the midpoint below consensus figures, despite affirming the more robust longer-term outlook.
Short interest has been high throughout the year and hit a peak in early Q4. The interest has subsided since, but remains elevated near the peak at 5.5%. The risk is that shorts will continue to impact the market in the near term, potentially leading to market volatility or a more pronounced correction in this utility stock.
The technical outlook is good. This stock is in an uptrend and retreated to its trendline in early December. This sets up a trend-following entry point that may be confirmed in upcoming sessions. Support is evident at the critical levels, near the 150-moving average, so a strong signal and continuation of the trend is likely to follow. In that scenario, EVRG will continue to advance, potentially setting a new high in early 2026. If not, this market could fall below the critical support line, turning it into resistance that drives the stock price down to firmer support targets near $68.
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The article "Unassuming Evergy Energy: The AI Boost Your Income Portfolio Needs" first appeared on MarketBeat.
