Jefferies reduced its price target on PPL Corp to $44 from $48 while maintaining a Buy rating, citing valuation adjustments. The firm’s move follows a similar cut by BMO Capital, which lowered its target to $38 from $40 while keeping an Outperform rating.
PPL’s stock traded at $35.01 on Wednesday, down 0.1% in morning trading. The utility’s shares trade at a 20.7x trailing price-to-earnings ratio with a 0.76 PEG ratio, and the company has paid dividends for 56 consecutive years.
Jefferies’ valuation assessment places PPL at roughly a 4% discount to its 2029 earnings estimate. InvestingPro data also suggested the stock is trading above its fair value estimate. The firm highlighted PPL’s long-term earnings growth potential, projecting an 8% or higher compound annual growth rate in EPS.
The company’s Invitium GenCo joint venture with Blackstone is expected to contribute 4 to 5 cents in EPS per gigawatt by the 2030s, with an additional 15 cents of upside into the early 2030s. PPL operates regulated utilities in Pennsylvania, Kentucky, Virginia, and Rhode Island.
PPL reported second-quarter earnings of $0.33 per share on $2.11 billion in revenue, missing Wall Street expectations of $0.37 per share and $2.19 billion in sales. The company reaffirmed its full-year guidance range of $1.90 to $1.98 per share.
Regulatory filings showed Kentucky Public Service Commission approvals for increased annual revenues for PPL’s subsidiaries Louisville Gas and Electric Company and Kentucky Utilities Company. The increases totaled approximately $4 million and $3 million, respectively.
