IDA: Sector Tailwinds And Capex Discipline Will Support Future Earnings And Dividends

Analysts have nudged their fair value estimate for IDACORP slightly lower, from $141.00 to $140.50, as they balance a more modest long term revenue growth outlook with resilient margins and supportive sector level capital cost and valuation dynamics reflected in recent Street research.

Analyst Commentary

Street research on IDACORP presents a mixed but generally constructive backdrop, with upward price target revisions from bullish analysts offset by more cautious views that emphasize valuation discipline and regulatory execution risk.

Bullish Takeaways

Bullish analysts have raised price targets into the mid 140s and 150s, signaling confidence that IDACORP can sustain above average total return potential relative to current trading levels.
Recent sector commentary highlights a favorable setup of rising capital investment and declining cost of capital. This could support IDACORP's rate base growth and justify higher multiples if execution remains solid.
The view that utilities remain materially undervalued as structural tailwinds build, including long term electrification and grid modernization, underpins a more supportive sector backdrop for IDACORP's growth runway.
Positive revisions around a constructive Q3 update cycle reinforce expectations that IDACORP can navigate its capital plan while preserving earnings visibility and dividend durability.

Bearish Takeaways

Bearish analysts maintain more neutral stances, with Equal Weight ratings and modestly lower price targets that suggest limited near term upside from current levels.
Cautious views center on the balance between rising capital needs and regulatory frameworks. There is concern that slower allowed returns or delayed recovery could pressure valuation if execution stumbles.
The stock's premium relative to some peers tempers enthusiasm, as some see better risk reward skew in utilities where growth is viewed as more clearly translating into accelerated earnings.
Incremental downward adjustments to targets, even if small, underline the risk that any disappointment in capital deployment, cost control, or rate outcomes could lead to further derating from recent highs.

What's in the News

Raised 2025 earnings guidance, with IDACORP now expecting earnings per diluted share between $5.80 and $5.90, up from prior guidance of $5.70 to $5.85 (company guidance).

Valuation Changes

The fair value estimate has edged down slightly from $141.00 to $140.50, reflecting a modest recalibration of long term assumptions.
The discount rate is essentially unchanged, moving fractionally lower from 6.956 percent to 6.956 percent, indicating a stable perceived risk profile.
The revenue growth outlook has been trimmed slightly, from 10.02 percent to approximately 9.99 percent, signaling a marginally more conservative top line trajectory.
The net profit margin has risen slightly, from 18.86 percent to about 18.88 percent, suggesting a minor improvement in expected profitability.
The future P/E multiple has decreased slightly, from 20.53x to approximately 20.46x, implying a modestly lower valuation multiple applied to forward earnings.

Strong regional growth and electrification trends are fueling higher electricity demand, supporting recurring revenue and long-term business expansion.
Planned infrastructure investments and regulatory support position IDACORP for enhanced earnings stability and potential upside from underestimated future load growth.
Heavy dependence on weather-sensitive hydro, regulatory uncertainties, and rising infrastructure costs threaten earnings stability and may erode returns if risks materialize or are not mitigated.

Catalysts

About IDACORP

Engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States.What are the underlying business or industry changes driving this perspective?

Robust customer and population growth in IDACORP's service area, combined with significant new large-scale industrial investments (e.g., Micron fabs, data centers), suggests sustained above-average electricity demand well into the 2030s, supporting long-term revenue growth.
Electrification trends, including increased deployment of EV fast-charging infrastructure and broader electrification of end uses, are driving incremental kWh sales and recurring revenue, with large unforecasted load growth potential from new projects not yet included in official load projections.
Massive planned capital investments in transmission lines, energy storage, and generation assets-supported by a constructive regulatory environment and recent rate case filings-are set to expand IDACORP's rate base, enhancing regulated returns and long-term earnings growth.
Ongoing national and regional focus on clean energy transition and grid modernization, including federally supported incentives, positions IDACORP to successfully grow its asset base, take advantage of tax credits, and enhance earnings stability and net margins through cost recovery.
Conservative IRP forecasts and increasing inquiry volume for new large loads indicate load growth and capital needs may be underestimated, offering potential positive surprises to future revenue and earnings as more projects materialize and are reflected in future regulatory filings.

IDACORP Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming IDACORP's revenue will grow by 8.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 17.0% today to 19.2% in 3 years time.
Analysts expect earnings to reach $441.8 million (and earnings per share of $7.29) by about September 2028, up from $306.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.5x on those 2028 earnings, down from 21.9x today. This future PE is greater than the current PE for the US Electric Utilities industry at 19.9x.
Analysts expect the number of shares outstanding to grow by 1.43% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

IDACORP Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

IDACORP's reliance on hydroelectric generation and sensitivity to weather patterns, such as low precipitation and drought, increase volatility in earnings and pose a risk to net margins if unfavorable climate trends persist or worsen.
The company's ongoing and accelerating capital investment needs (especially in transmission, storage, and new gas-fired or renewable generation), driven by rapid load growth and new large customer projects, require significant financing; if regulators disallow cost recovery, or if increased debt and equity issuance dilute returns, future earnings and return on equity (ROE) may be pressured.
Uncertainty around regulatory approval processes, including the outcomes of pending rate cases, the introduction of new depreciation and interest trackers, and the use of additional tax credits, creates potential risk to revenue and net income if regulatory lag persists or if lower allowed ROEs or unfavorable terms are set.
Delays, permitting challenges, or unfavorable economic impacts (such as tariffs or executive orders impacting projects like Jackalope Wind) could force a shift in planned resource mix, leading to increased reliance on gas or alternative resources; this could result in higher O&M expenses, capital costs, or stranded assets, negatively affecting margins and future profitability.
Growing exposure to labor cost increases, wildfire mitigation, and insurance expenses, driven by the need to maintain and harden infrastructure against extreme weather and operational risks, may erode net margins and reduce the potential for future earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $132.667 for IDACORP based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.3 billion, earnings will come to $441.8 million, and it would be trading on a PE ratio of 20.5x, assuming you use a discount rate of 6.8%.
Given the current share price of $124.52, the analyst price target of $132.67 is 6.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Offer Mixed Views as IDACORP Price Targets and Valuation Move Higher