DTE Energy: Analyst Maintains Hold Rating Amid Mixed Regulatory Signals and IRM Support

BMO Capital analyst James Thalacker maintains a Hold rating on DTE Energy, boosting the price target to $144.00. The analyst views the staff's support for extending the Infrastructure Recovery Mechanism (IRM) as a positive development, despite the recommended Return on Equity (ROE) being slightly lower than the current authorization. Thalacker expects DTE shares to trade within a narrow range as the company works towards achieving its full-year guidance and regulatory outcomes.

Title: BMO Capital Raises Price Target for DTE Energy

BMO Capital analyst James Thalacker maintains a Hold rating on DTE Energy (NYSE:DTE), boosting the price target to $144.00. The analyst views the staff's support for extending the Infrastructure Recovery Mechanism (IRM) as a positive development, despite the recommended Return on Equity (ROE) being slightly lower than the current authorization. Thalacker expects DTE shares to trade within a narrow range as the company works towards achieving its full-year guidance and regulatory outcomes.

DTE Energy, a utility giant with a market capitalization of $28.75 billion, has seen its stock price rise to near its 52-week high of $142.05. The company has maintained dividend payments for an impressive 55 consecutive years. The recent price target increase from $140.00 to $144.00 reflects refreshed mark-to-market multiples in BMO’s sum-of-the-parts valuation model for DTE Energy [1].

The price target increase follows a brief sell-off in DTE shares on Friday after staff testimony was posted in the company’s electric rate case. BMO Capital views the initial position in the rate case as "better than the implied headline and constructive in parts," noting staff support for extending the Infrastructure Recovery Mechanism (IRM) at increasing levels. The firm pointed out that while the 9.80% recommended Return on Equity (ROE) is below the currently authorized 9.90%, it is consistent with staff’s 2023 Electric case recommendation [1].

DTE Energy reported its second-quarter 2025 earnings, with operating earnings of $283 million or $1.36 per share, missing analysts’ expectations of $1.48 per share. The company’s revenue forecast for the quarter was $2.65 billion, though the actual revenue figures were not disclosed. Mizuho raised its price target for DTE Energy to $151.00 from $145.00, maintaining an Outperform rating, citing growth potential in the data center sector. The earnings miss was attributed to a tax adjustment, which Mizuho expects to reverse in the second half of 2025. UBS reiterated its Buy rating with a price target of $148.00 despite concerns about a Michigan Public Service Commission Staff recommendation. The recommendation suggested a rate base 98% of DTE’s request, approximately $0.5 billion less than proposed. These developments highlight ongoing financial and regulatory challenges for the company [2].

DTE Energy is leveraging long-term capital investments to modernize and expand its infrastructure, enhancing service efficiency for its customers. The company is also accelerating investments in renewable generation to drive sustainable growth. However, the company faces risks related to its poor solvency position and challenges in the energy trading business. DTE plans to invest $30 billion over the next five years, supporting its long-term operating earnings growth target of 6-8% [2].

DTE Energy's cash and cash equivalents as of June 30, 2025, totaled $0.08 billion. As of the same date, its long-term debt was $22.94 billion, significantly higher than the cash balance. This implies that the company holds a weak solvency position. The company expects market conditions for its Energy Trading business to remain challenging. The company notes that commodity price volatility and uncertainty around regulatory changes and adjustments to the Regional Transmission Organization operating guidelines can impact the segment’s profitability [2].

Over the last three months, 4 analysts have evaluated DTE Energy, offering a diverse set of opinions from bullish to bearish. The average target is $141.25, accompanied by a high estimate of $147.00 and a low estimate of $136.00. Analysts frequently update their recommendations based on evolving market conditions and company performance. This information provides a snapshot of how analysts perceive the current state of the company [3].

References

[1] https://www.investing.com/news/analyst-ratings/dte-energy-stock-price-target-raised-to-144-from-140-at-bmo-capital-93CH-4209361
[2] https://finance.yahoo.com/news/dte-energy-advances-clean-energy-151700825.html
[3] https://www.benzinga.com/insights/analyst-ratings/25/08/47316248/forecasting-the-future-4-analyst-projections-for-dte-energy