Otter Tail (OTTR) Board Refresh: What Stronger Utility Expertise Could Mean for Its Valuation

Otter Tail (OTTR) just refreshed its board, adding former Xcel Energy regional president Chris Clark and ex Spire CFO Steve Rasche, a move that quietly upgrades both regulatory and financial expertise in the boardroom.

See our latest analysis for Otter Tail.

The news lands at a time when Otter Tail’s share price has climbed meaningfully this year, with a double digit year to date share price return and a strong multi year total shareholder return that suggests momentum is still largely intact.

If this kind of quiet, compounding story appeals, it could be worth scanning fast growing stocks with high insider ownership to spot other under the radar names where insiders are meaningfully aligned with long term investors.

Yet with Otter Tail now trading near its analyst target and boasting a stellar multiyear run, investors have to ask: Is this still an overlooked value in regulated utilities, or has the market already priced in its future growth?

Most Popular Narrative Narrative: 1.1% Undervalued

With the narrative fair value sitting at 83 dollars against a last close of 82.12 dollars, the story frames Otter Tail as almost exactly priced, with just enough upside to justify a closer look at its underlying assumptions.

The analysts have a consensus price target of 83.0 dollars for Otter Tail 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 would need to believe that by 2028, revenues will be 1.4 billion dollars, earnings will come to 195.9 million dollars, and it would be trading on a PE ratio of 21.7x, assuming you use a discount rate of 6.8 percent.

Read the complete narrative.

Want to see how a shrinking profit pool can still support a higher future earnings multiple than the wider industry, and why modest growth assumptions are doing so much heavy lifting in this fair value story? The full narrative unpacks how earnings, margins and valuation are stitched together to make today’s near target price look reasonable.

Result: Fair Value of $83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, large new load wins or faster utility segment earnings growth could support stronger demand, steadier cash flows, and a higher, more justified valuation multiple.

Find out about the key risks to this Otter Tail narrative.

Another View: Market Multiples Point to a Discount

While the narrative fair value suggests Otter Tail is almost fully priced, its 12.3x earnings multiple still sits well below the US utilities sector at 19.7x, its peer group at 24.7x, and even its own 15.5x fair ratio. This spread hints at potential valuation upside if sentiment returns to more typical levels.

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Otter Tail for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Otter Tail Narrative

If you see the story differently or want to stress test your own assumptions, you can build a custom narrative in just minutes: Do it your way.

A great starting point for your Otter Tail research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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