Xcel Energy (XEL) Valuation in Focus After Q3 Results and Fresh 2025–2026 Earnings Guidance

Xcel Energy (XEL) just announced its third quarter results along with earnings guidance for both 2025 and 2026, giving investors an early look at the company’s direction for the next year.

See our latest analysis for Xcel Energy.

Xcel Energy’s stock has shown strong momentum this year, with a share price return of 22.0% year-to-date and a rolling 1-year total shareholder return of 26.2%. After steady gains over the past quarter and renewed guidance for 2025 and 2026, investors seem to be warming to the company’s long-term outlook. Recent leadership changes have added further optimism, as the company continues to build on its expansion and strategic plans.

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But after a year marked by steady share price gains and new longer-term guidance, is Xcel Energy’s current valuation attracting new buyers? Or has the market already priced in the utility’s growth prospects?

Most Popular Narrative: 3.6% Undervalued

Xcel Energy’s fair value estimate from the most-followed narrative stands slightly above the last close, suggesting room for upside if growth accelerates as outlined. The current price leaves little margin for error, making the quantitative story behind this estimate especially important.

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. This positions the company for continued growth despite market undervaluation.

Read the complete narrative.

Want to see what’s fueling this valuation? The assumptions run deeper than headline growth. Consider margin expansion, capital allocation moves, and ambitious earnings roadmaps. Discover the key levers that analysts believe could set Xcel’s future apart.

Result: Fair Value of $84.60 (UNDERVALUED)

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

However, risks remain, such as regulatory delays on new projects and ongoing wildfire liabilities. Both of these factors could quickly shift the outlook for Xcel Energy.

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

Another View: DCF Signals a Different Story

Looking at Xcel Energy through our DCF model offers a more cautious take. The SWS DCF model estimates fair value around $65.94 per share, which is meaningfully below the latest price. This raises the question of whether the market is overly optimistic, or if some risks are underappreciated. Which valuation do you trust?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Xcel Energy 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 848 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 Xcel Energy Narrative

If you want a different perspective or enjoy digging into the numbers on your own terms, you can put together your own view of Xcel Energy in just minutes. 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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