TXNM Energy TXNM Q2 2025 Earnings Preview Upside Anticipated on Strong Texas Utility Performance

Forward-Looking Analysis
TXNM Energy's Q2 2025 earnings report, scheduled for release on July 30th, is anticipated to demonstrate an improvement following its Q1 results. Analysts have a consensus rating of "Buy" with an average price target of $54.86, despite forecasting a slight decrease in stock price. The company reaffirmed its full-year earnings guidance, expecting earnings in the range of $2.74-$2.84 per diluted share. TXNM is projected to grow earnings by 20.4% per annum and EPS by 17.6% annually. The Texas utility segment, TNMP, is anticipated to continue as a growth driver due to successful rate recovery mechanisms and increased retail load. However, challenges remain in the New Mexico segment, PNM, due to lower transmission margins and rising operating costs. To align with full-year guidance, TXNM must significantly outperform Q1 results in upcoming quarters, averaging approximately $0.85 per quarter for the remainder of the year.

Historical Performance Review
In Q1 2025, TXNM Energy reported revenue of $482.79 million and net income of $12.80 million, translating to earnings per share (EPS) of $0.10. This marked a decline from Q1 2024, where GAAP earnings per share were $0.52. Ongoing earnings per share also dropped to $0.19 from $0.41 year-over-year. Despite the downturn, TXNM maintained its full-year guidance and long-term growth target, underscoring temporary setbacks but revealing a stark dependence on Texas operations, while New Mexico faced execution challenges.

Additional News
TXNM Energy continues to pursue its commitment to clean energy initiatives and has maintained its focus on long-term growth targets despite recent financial pressures. The firm is projected to grow earnings and revenue by 20.4% and 6% per annum, respectively. Return on equity is expected to improve, reinforcing its strategic direction. Analysts have reiterated a "Buy" consensus rating, indicating confidence in TXNM’s business trajectory, although the average price target forecasts a slight decrease in stock price. The reaffirmation of earnings guidance for 2025 underscores management's confidence in overcoming current operational challenges and achieving projected growth.

Summary & Outlook
TXNM Energy appears to be on a path to recovery, driven primarily by strong performance in its Texas utility operations. However, ongoing challenges in New Mexico cast uncertainties over meeting full-year guidance. With projected revenue and EPS growth, the company's financial health remains resilient amidst increased interest expenses and diluted EPS. Despite these hurdles, the reaffirmation of earnings guidance and analysts' "Buy" consensus signal a cautiously optimistic outlook. The firm’s dedication to clean energy and structured growth plans position it for potential upside, establishing a neutral to slightly bullish stance on future prospects.