Duke Energy: Scotiabank raises PT to $128 from $120, maintains Sector Perform.

Duke Energy: Scotiabank raises PT to $128 from $120, maintains Sector Perform.

Charlotte, North Carolina-based Duke Energy Corporation (DUK), one of the largest energy holding companies in the United States, has seen its stock price targets adjusted by Scotiabank. The investment bank has raised its price target for DUK from $120 to $128, maintaining its "Sector Perform" rating.

The revised target reflects a modest 4.9% upside potential from the current stock price levels, according to Scotiabank analysts. This adjustment aligns with the recent performance of Duke Energy, which has shown resilience despite mixed quarterly results. Over the past 52 weeks, DUK stock has gained 11.7%, outpacing the S&P 500 Index's 21.5% gains [1].

In its latest quarterly report, Duke Energy reported a year-over-year increase in overall topline to $7.5 billion, driven by growth in both electric and natural gas revenues. However, this growth was partially offset by higher operating and maintenance expenses and interest expenses, leading to a 5.9% increase in adjusted EPS to $1.25, which fell short of consensus estimates.

For the full fiscal 2025, analysts expect Duke Energy to deliver an EPS of $6.31, up 7% year-over-year. The company has a mixed earnings surprise history, having missed the Street's bottom-line estimates twice over the past four quarters and surpassed them on two other occasions.

The stock has a consensus "Moderate Buy" rating, with 11 analysts recommending "Strong Buy," one suggesting "Moderate Buy," and nine advocating "Hold" ratings [1].

In a separate development, Duke Energy has agreed to sell a 19.7% indirect equity interest in Duke Energy Florida to infrastructure investor Brookfield in an all-cash deal valued at $6 billion. This transaction is expected to enhance Duke Energy's financial position and support its energy modernization strategy. The deal is part of Brookfield's Super-Core Infrastructure strategy and involves Brookfield investing in Florida Progress, owner of Duke Energy Florida.

The $6 billion proceeds will contribute to Duke Energy's expanded five-year capital plan, now totaling $87 billion, and replace holding company debt. Duke Energy president and CEO Harry Sideris expressed satisfaction with the partnership, stating that it best positions the company to unlock additional capital investments in Duke Energy Florida during this unprecedented growth period.

The acquisition awaits regulatory clearance from bodies including the Federal Energy Regulatory Commission and the Committee on Foreign Investment in the United States. JP Morgan Securities and Skadden, Arps, Slate, Meagher & Flom are advising Duke Energy financially and legally, respectively, while RBC Capital Markets and Kirkland & Ellis are advising Brookfield.

References:
1. [1] https://www.barchart.com/story/news/33913101/duke-energy-stock-analyst-estimates-ratings
2. [2] https://www.nsenergybusiness.com/news/duke-energy-to-sell-19-7-stake-in-florida-unit-to-brookfield-for-6bn/