CMS Energy (CMS) Valuation Check After Recent Share Price Pullback

Recent Performance and Context

CMS Energy (CMS) has slipped about 2% today and is down roughly 5% over the past month, a pullback that nudges the stock into more interesting territory for long term utility investors.

See our latest analysis for CMS Energy.

That recent slide comes after a steadier run this year, with the share price at $69.17 and a positive year to date share price return. Multi year total shareholder returns point to gradually fading but still respectable momentum for a regulated utility.

If CMS Energy has you thinking about defensive names, it could be worth broadening your watchlist and discovering stable growth stocks screener (None results).

With shares off recent highs yet still delivering solid multi year returns, investors face a familiar dilemma: is CMS Energy quietly undervalued at these levels, or is the market already pricing in its next leg of growth?

Most Popular Narrative: 11.3% Undervalued

With CMS Energy last closing at $69.17 versus a narrative fair value of $78.00, the current pullback sits against a richer long term story.

The accelerating demand for electricity driven in part by large new data center projects and strong population and business growth within Michigan is set to sustainably boost sales growth above prior forecasts, likely resulting in stronger top line revenue and rate base expansion.

Read the complete narrative.

Want to see how steady grid spending, rising margins and a premium earnings multiple combine into that valuation puzzle? The full narrative lays out every assumption.

Result: Fair Value of $78 (UNDERVALUED)

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

However, that upside story could quickly change if Michigan’s regulatory climate cools or if big ticket data center loads ramp more slowly than expected.

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

Another Take on Value

Our SWS DCF model paints a cooler picture, putting fair value closer to $64.40, which makes today’s $69.17 share price look slightly overvalued rather than cheap. If the cash flow math is right, is the narrative market already paying up for CMS?

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 CMS 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 913 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 CMS Energy Narrative

If you see the story differently or want to dive into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your CMS Energy research is our analysis highlighting 1 key reward 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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