April 19, 2024

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PPL Corp’s Systematic Investments & Timely Recovery Bode Well

PPL Corporation’s PPL ongoing capital investments to strengthen infrastructure, focus on cleaner generation, growth in domestic operation and hedging programs are tailwinds.

The Zacks Consensus Estimate for the company’s 2020 earnings is pegged at $2.50 per share on revenues of $8.22 billion. The bottom-line figure suggests 2.04% year-over-year increase. The same for the top line calls for a 5.79% rise on a year-on-year basis.

What’s Driving the Stock?

PPL Corp’s asset portfolio and business model are made to be adaptable to various market scenarios. It continues to follow an organic growth strategy to expand as well as upgrade its electric and gas infrastructure.

The company’s capital investment plan primarily focuses on infrastructure construction projects for generation, transmission and distribution. After investing $29 billion in the past decade, the company is going to spend nearly $14 billion through 2020-2024. Based on systematic investments and timely recovery, the company expects to achieve compound annual earnings growth of 4-6% in the long term. These planned investments will expand rate base from $28.3 billion in 2019 to $34.2 billion in 2024 at a CAGR of 4%.

The company raised its carbon emission reduction goal to 80% by 2050 from 2010 levels, up from the previous target of 70%. In Kentucky, the company retired 272 megawatts of coal-fired generation at EDW round facility. PPL Corp completed the construction of the first phase of subscription-based solar share program. The second phase is expected to be completed in the second quarter of 2020. These are option for customers to support local solar energy without installing equipment on their properties.

PPL Corp has a history of dividend payment. On Feb 14, the company announced an increase of its quarterly common stock dividend to 41.5 cents per share. This marked PPL Corp’s 296th consecutive quarterly dividend payout. The strong cash flow generation capacity enables the company to consistently pay out dividends to shareholders.

However, higher debt levels, unplanned outages at power plants as well as stringent laws and regulations outside the United States are headwinds for PPL Corp.

Zacks Rank & Price Performance

The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



In the past 12 months, shares of the company have lost 23.7% compared with the industry’s decline of 11.9%.

Stocks to Consider

Few better-ranked stocks from the same industry are Pacific Gas & Electric Co. PCG, NorthWestern Corporation NWE and Duke Energy Corporation DUK. All the three stocks hold a Zacks Rank #2 (Buy).

Long-term earnings growth of Pacific Gas & Electric, NorthWestern and Duke Energy is pegged at 2.50%, 3.10% and 4.70%, respectively.

Pacific Gas & Electric, NorthWestern and Duke Energy have trailing four-quarter positive earnings surprise of 7.35%, 7.62% and 6.53%, on average, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Duke Energy Corporation (DUK) : Free Stock Analysis Report
PPL Corporation (PPL) : Free Stock Analysis Report
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NorthWestern Corporation (NWE) : Free Stock Analysis Report
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