Alliant Energy Corporation (NASDAQ:LNT) stock fell 0.11% (As on June 27, 1:06:02 AM UTC-4, Source: Google Finance) after BofA Securities Upgrades the company to Buy From Neutral, Price Target is $58, up from $55. Recent Iowa Utilities Board decisions in support of advance ratemaking for solar suggest an improvement in perception of the regulatory climate in that state that will drive re-rating in Alliant shares, the firm says.
Meanwhile, LNT investments in natural gas projects and stable return from regulated assets are set to drive its bottom line. LNT’s focus on electricity generated from clean assets will help serve its expanding customer base. Alliant Energy plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to its generation portfolio. It intends to invest $8.5 billion during 2023-2026.
Constructive regulatory environment will enable the company to recover capital expenditures. Its strong and flexible investment plan will support an 8% base CAGR growth rate from 2022 through 2026. LNT continues to expand its solar energy operations in Wisconsin. It has all solar sites and panels in control for its planned 1.1 gigawatts of utility-scale solar projects within the state by mid-2024. The regulated nature of Alliant Energy’s operations provides it with strong earnings potential. Nearly 99% of the company’s earnings are generated from regulated op*erations.
Moreover, Alliant Energy has reaffirmed its EPS guidance for 2023 of $2.82 – $2.96. This is based on ability of Interstate Power and Light Company (IPL) and WPL to earn their authorized rates of return, stable economy and resulting implications on utility sales, normal temperatures in its utility service territories, execution of cost controls, execution of capital expenditure and financing plans and consolidated effective tax rate of 2%. The company is on track to place 840 MW of utility scale solar in service by the first half of 2024.
Further, Alliant Energy’s Utilities and Alliant Energy Corporate Services, Inc. operations generated $0.65 per share of GAAP EPS in the first quarter of 2023, which was $0.08 per share lower than the first quarter of 2022. The primary drivers of lower EPS were lower retail electric and gas sales due to impacts of warmer than normal temperatures on customer demand in 2023, compared to an increase in sales in the first quarter of 2022 due to impacts of colder than normal temperatures on customer demand, higher interest expense and timing of income tax expense.