On Jun 12, we have issued an updated research report on
Xcel Energy Inc.
). The utility operator is poised to benefit from large-scale
investments directed primarily at generation, distribution and
transmission operations. The company's CapX2020 transmission
program has made excellent progress and it has already completed
the 230-Kilovolt (Kv) transmission line in Minnesota.
These projects will offer substantial support to Xcel Energy's
large-scale generation operations and help provide service
reliability to customers.
However, coal still holds a major share in Xcel Energy's generation
mix, which will make its coal-fired units subject to strict
environment legislations. Moreover, rising operation and
maintenance expense might limit the company's profitability.
Xcel Energy, a Zacks Rank #3 (Hold) stock, got off to a flying
start in the first quarter of 2014 with both earnings and revenue
beating the Zacks Consensus Estimates. The severe winter weather
drove up power demand, which in turn boosted sales. On a
year-over-year basis, quarterly top and bottom line also reported
The continued market optimism in Xcel Energy's service territories
and positive rate revisions at its North Dakota and New Mexico
service zones should support the company's revenue stream. In
addition, Xcel Energy's series of clean energy projects will prove
beneficial in the long run given the current pulse in the U.S.
market favoring green energy.
The company expanded its renewable generation capabilities by 11%
from 2005 through 2013 and further intends to broaden green
generation's share to 27% by 2020.
Nonetheless, Xcel Energy needs to watch out for market price
volatilities and operational risks associated with explosion, leak
and mechanical setbacks at natural gas transmission and
Key Picks from the Sector
Other better-ranked utility players include
NRG Energy Inc.
Korea Electric Power Corp.
). All these stocks currently carry a Zacks Rank #1 (Strong
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