Jefferies Upgrades MDU Resources Group to Buy, Raises PT to $20

Jefferies Upgrades MDU Resources Group to Buy, Raises PT to $20

Jefferies, a leading financial services firm, has upgraded MDU Resources Group, Inc. (NYSE: MDU) from Hold to Buy, raising its price target to $20.00 from $18.00 previously Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1]. The upgrade comes as the company continues to demonstrate robust financial health and growth potential.

MDU Resources Group is engaged in providing essential energy products and services through its regulated energy delivery businesses. The company operates in several segments, including Electric, Natural gas distribution, Pipeline, and Other. These segments generate, transmit, and distribute electricity and natural gas in various states across the United States, with a strong presence in Montana, North Dakota, South Dakota, Wyoming, Idaho, Minnesota, Oregon, and Washington Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1].

The research firm highlighted MDU’s compelling value, noting that the stock currently trades at an 11% discount to its core business value, even after incorporating potential upside from the Bakken East Pipeline project at a 50% probability. The company maintains a solid financial profile with a P/E ratio of 18.3x and a healthy 3.48% dividend yield Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1].

Jefferies cited MDU’s differentiated 6-8% EPS compound annual growth rate, which is significantly higher than other small and mid-cap growth stories in the sector. The firm believes that post-spin noise that led to guidance revisions earlier this year is now behind the company, creating a clearer path forward. Additionally, an upcoming pipeline announcement is expected to serve as a potential catalyst that could drive a re-rating opportunity for the stock Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1].

Despite a recent earnings miss in the second quarter of 2025, where EPS fell short of forecasts, MDU Resources Group managed to surpass revenue expectations. The company also announced a 7.7% increase in its quarterly dividend, raising it to 14 cents per share. This adjustment brings the annualized dividend payout to 56 cents per share, aiming for a long-term payout ratio of 60% to 70% of earnings Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1].

In governance updates, MDU Resources has elected Charles M. Kelley and Tammy J. Miller to its board of directors, effective August 2025. Kelley brings extensive experience from the natural gas industry, having managed substantial capital projects in his previous role Jefferies Upgrades MDU Resources Group to Buy From Hold, Price Target is $20^[1].