A Fresh Look at Xcel Energy (XEL) Valuation as Investors Weigh Recent Shareholder Returns

Xcel Energy (XEL) stock has caught the attention of investors lately as it continues to deliver steady performance. Shares have returned 24% over the past year, reflecting the company’s strong operational execution and consistent financial growth.

See our latest analysis for Xcel Energy.

Momentum has picked up for Xcel Energy, with the share price advancing more than 11% in the past three months. This has contributed to a strong 24% total shareholder return over the last year. Recent gains suggest that investors are recognizing both consistent operational delivery and the company’s longer-term growth potential, as market sentiment leans increasingly positive.

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With steady gains already realized, investors may be wondering whether Xcel Energy’s outlook is fully reflected in the current share price or if today’s levels still offer an attractive entry point for new buyers.

Most Popular Narrative: 8.4% Undervalued

Xcel Energy’s widely followed narrative points to a fair value of $88.35, which is higher than its recent closing price of $80.91. This gap is drawing renewed attention as investors seek to gauge whether the current market price offers an opportunity, based on consensus assumptions and risks.

“Accelerated investments in clean energy and grid modernization are expected to expand Xcel's regulated asset base, driving sustained earnings growth and improved operational efficiency. Favorable policy incentives and strong regulatory relationships support stable cash flows and higher returns, positioning the company for continued growth despite market undervaluation.”

Read the complete narrative.

How did analysts arrive at a number above the market price? The details behind this call include bold growth rates and expectations around energy transition. There is one key projection at the heart of it. Guess what it is? Peel back the narrative to see what’s powering this valuation upgrade.

Result: Fair Value of $88.35 (UNDERVALUED)

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

However, ongoing wildfire liabilities and potential regulatory delays could challenge Xcel’s growth outlook. These factors remind investors that future risks still remain.

Find out about the key risks to this Xcel Energy narrative.

Another View: Multiples Suggest Caution

While the consensus narrative points to Xcel Energy being undervalued, our look at one key market ratio tells a more cautious story. The company’s current price-to-earnings ratio stands at 25x, which is higher than both its industry average of 20.8x and the peer average of 20.7x. It is also above its fair ratio of 24.3x. This gap hints that the market may be factoring in growth expectations that could be tough to achieve. Is this a warning sign, or does it spotlight potential opportunity if the company outperforms?

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

Build Your Own Xcel Energy Narrative

If you see the story differently or want a deeper look, you can dig into the numbers and build your own perspective in just a few minutes with Do it your way.

A great starting point for your Xcel Energy research is our analysis highlighting 2 key rewards and 2 important warning signs 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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