Analysts have increased their average price target for Xcel Energy by over $3 to approximately $88. This reflects increased confidence after the Marshall Fire legal settlements and improved earnings growth projections.

Analyst Commentary

Recent Street research on Xcel Energy highlights a broadly positive shift in sentiment, with several firms raising their price targets and reaffirming constructive ratings following favorable legal settlements and improved growth expectations. Analysts underscore both upside opportunities and areas for caution as the company enters a new phase of execution.

• Bullish analysts have raised price targets significantly, some by as much as $8 to $10. This reflects renewed confidence in Xcel’s earnings growth profile after the resolution of major legal uncertainties.
• There is consensus that Xcel’s access to renewables-rich regions and a lower-cost decarbonization pathway position it advantageously for sustained rate base and earnings growth.
• Multiple reports highlight Xcel’s discount valuation relative to large-cap peers, despite a history of strong execution and best-in-class growth. This suggests a potential for share price re-rating.
• Bullish projections extend beyond near-term recovery, with some estimates expecting annual EPS growth trends of 4% to 5% beginning in 2027, above current consensus expectations.

• Bearish analysts note that while the legal settlements remove a key overhang, the stock's ability to command a premium valuation still depends on sustained fundamental execution and overcoming past volatility.
• Some caution remains around market multiples and the pace at which Xcel can close its discount to peers, especially if sector-wide headwinds emerge or capital investments face delays.
• There is recognition that recent price target increases are partly contingent on guidance reaffirmation and successful regulatory outcomes in key states. These factors continue to carry risk.
• Neutral ratings and modest upward price target adjustments from certain houses indicate some lingering skepticism over Xcel’s near-term earnings momentum relative to more diversified peers.

What's in the News

• Xcel Energy reaffirmed its ongoing earnings per share guidance for 2025 and is maintaining the range of $3.75 to $3.85. (Key Developments)
• The company initiated 2026 earnings guidance, projecting ongoing earnings per share in the range of $4.04 to $4.16. (Key Developments)
• Xcel Energy reached agreements in principle to settle all claims stemming from the 2021 Marshall Fire litigation. The company expects to pay about $640 million, with roughly $350 million covered by insurance and no costs passed to customers. Xcel Energy maintains it did not admit any fault or negligence in these settlements. (Key Developments)

Valuation Changes

• Consensus Analyst Price Target has increased from $84.60 to $88.35, reflecting a moderate rise in fair value assessments.
• Discount Rate remains unchanged at 6.78%, indicating a stable risk assessment by analysts.
• Revenue Growth expectations have declined slightly, moving from 8.09% to 7.80%.
• Net Profit Margin has improved modestly, increasing from 16.52% to 16.90%.
• Future P/E ratio has risen slightly, from 22.85x to 23.06x, suggesting a slight increase in anticipated valuation multiples.