In a report released on February 21, Julien Dumoulin Smith from Jefferies reiterated a Buy rating on TXNM Energy (TXNM – Research Report), with a price target of $53.00.
Julien Dumoulin Smith has given his Buy rating due to a combination of factors that highlight TXNM Energy’s strong financial performance and growth potential. The company concluded FY24 on a high note, achieving the upper end of its guidance with a notable increase in its earnings per share (EPS) compound annual growth rate (CAGR) to 7-9%, up from the previous 6-7%. This growth is largely driven by substantial investments in Texas transmission and New Mexico capacity additions, positioning TXNM among the most promising in the small to mid-cap sector.
Moreover, TXNM’s strategic capital expenditure plans, including a 26% increase over the prior five-year plan, are expected to further bolster its rate base CAGR to 12.4%. The company’s forward-looking initiatives, such as the Permian Basin projects and New Mexico’s renewable energy and transmission expansion, underscore its long-term growth trajectory. These factors, coupled with favorable regulatory developments and a robust financing strategy, contribute to a lower-risk growth outlook, justifying the Buy rating.
In another report released on February 21, Wells Fargo also reiterated a Buy rating on the stock with a $58.00 price target.
TXNM’s price has also changed moderately for the past six months – from $40.780 to $53.220, which is a 30.51% increase.