In recent months, the Utilities index has dropped 2.3 percent this year, while the entire S&P 500 has decreased 14%.
Four of Wells Fargo''s overly overweight utility names are in the midst of holding analyst days.
NextEra Energy (Analyst Day: June 14)
What a difference a year makes for NextEra (NEE) - Get NextEra Energy Inc. Report, according to analysts. The renewable pacesetter was rising in terms of profits in 2020 and 2021, as shares benefited from the risk-on trading in the market.
So far this year, the stock has overperformed the S&P 500 Utilities index by about 20%. According to the analysts, the problem is largely related to macro conditions but not without a few other problems.
We believe the analyst day is about regaining control of the narrative. We expect the National Energy Agency (NEE) to highlight the significant long-term trend toward decarbonization and electrification, which looks to be even more powerful in the face of rising fossil fuel prices.
PPL (Analyst Day: June 9)
The analysts said of PPL (PPL) that the annualized earnings per share increase should be 5%. We believe the growth will be driven by a combination of modest rate growth and share repurchases.
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Moreover, if our numbers are correct, we believe stocks would bridge much of the 8%-10% price-earnings multiple gap versus peers, according to analysts. PPL will have one of the strongest balance sheets in the sector.
Entergy (Analyst Day: June 15)
Entergy (ETR) continues to be seen as an under-the-radar acronym, according to analysts. At some point we believe shares will gain support with investors, and the analyst day is an opportunity to attract attention.
ETR continues to monitor cheaply on a P-E multiple basis, trading at a 10% discount to peers, according to analysts.
On higher peer group multiples, we increase our forward price target to $140 per share. Entergy has recently traded at $117.70.
PG&E (Analyst Day: June 10)
The analysts said that the analyst day will focus on the company''s ongoing wildfire mitigation efforts, including the proposal to underground 10,000 miles of distribution lines in high-risk wildfire areas.
Patti Poppe, the CEO of the Fire Victims Trust, and her colleagues are attempting to increase the company''s ability to minimize wildfire risk. After all, the company still owns 378 million shares, representing 20% of PCG.
