Ameren Corp (NYSE:AEE) stock rose 0.018% (As on September 17, 11:16:03 AM UTC-4, Source: Google Finance) after the company received an upgraded stock rating from Mizuho, moving from Neutral to Outperform. In conjunction with this change, the firm also increased the price target for Ameren from $82.00 to $89.00.
Mizuho anticipates Ameren to reveal a capital update during their fourth-quarter 2023 earnings call scheduled for February 2025. Additionally, Ameren is slated to submit a Missouri integrated resource plan (IRP) in the same month of 2025. These anticipated disclosures are seen as pivotal informational events for investors and analysts following the utility company’s financial and strategic trajectory. The Midcontinent Independent System Operator (MISO) is expected to announce its first group of Tranche 2 projects, referred to as Tranche 2.1, in the fourth quarter of 2024. Following this, another set of transmission projects, named Tranche 2.2, is projected to be proposed by MISO in 2025. Ameren’s involvement in these projects could significantly influence its capital expenditure plans and subsequent earnings.
Mizuho also forecasts that Ameren will provide an update on its capital expenditure (capex) during the fourth-quarter 2024 earnings call in February 2025. This update is likely to include details on the Tranche 2.1 projects awarded to Ameren, as well as any additional projects that may emerge from the Missouri IRP.
The financial firm estimates that for every $500 million of additional investment spending at Ameren Missouri or Ameren Transmission, there could be an earnings per share (EPS) increase ranging from $0.05 to $0.06 for Ameren’s consolidated earnings. This projection underpins the optimistic outlook for the company’s stock performance and is a key factor in the raised price target and upgraded rating.
Meanwhile, Ameren reaffirmed its 2024 earnings guidance range of $4.52 to $4.72 per diluted share. Ameren recorded net income attributable to common shareholders for the six months ended June 30, 2024, of $519 million, or $1.95 per diluted share, compared to net income attributable to common shareholders for the six months ended June 30, 2023, of $501 million, or $1.90 per diluted share. The increase in year-over-year six month earnings reflected increased strategic infrastructure investments and disciplined cost control. Earnings were positively impacted by new Ameren Missouri electric service rates and higher electric retail sales that were driven by warmer spring and early summer temperatures and higher retail sales across all customer classes. In addition, earnings benefited from new Ameren Illinois Natural Gas service rates and rate design.