Ross Fowler, an analyst from Bank of America Securities, maintained the Sell rating on Black Hills (BKH – Research Report). The associated price target was raised to $59.00.
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Ross Fowler’s rating is based on a combination of factors affecting Black Hills Corporation’s financial prospects. The company’s expected earnings per share (EPS) growth for the coming years is projected to be between 4-6%, which is below average compared to its industry peers. This growth rate seems contingent on successful regulatory actions across multiple jurisdictions, where the affordability of customer bills remains a critical challenge.
Another concern is the financial burden from anticipated equity issuances and debt refinancing. The forecast includes significant equity issuance from 2025 onwards, which could dilute EPS by 2.5-3% annually. Additionally, around $1.0 billion of debt refinancing at a rate of 4.2% could further impact earnings. Despite these challenges, the company’s data center growth narrative remains solid, but the realization of any upside to its rate base growth appears to be a long-term prospect within the five-year plan.