PPL Corporation Trades Above 50 & 200-Day SMAs: How to Play the Stock?

PPL Corporation PPL is trading above its 50 and 200-day simple moving averages (SMAs), signaling a bullish trend. The firm has repositioned itself as a U.S.-focused energy company after the divestiture of the international operation. Increasing demand from the Data centers is creating new opportunities for the company.

PPL has a well-defined long-term capital investment strategy aimed at strengthening and expanding its infrastructure to ensure the delivery of safe, reliable and affordable energy. The company’s ongoing cost-saving initiatives are expected to enhance its profit margins.

PPL 50 and 200 Day SMAs

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The 50 and 200-day SMAs are key indicators for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of a stock’s uptrend or downtrend.

In the past three months, the company’s shares have gained 14.3% compared with the Zacks Utility- Electric Power industry’s 6.4% rise. PPL has outperformed the Zacks Utilities sector’s rise of 6.9%. The Zacks S&P 500 composite lost 2.5% in the same time period.

Another utility in the same space, Dominion Energy D, having substantial clean energy generation capability, has gained 5.2% in the past three months.

Price Performance (Three months)

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Should you consider adding PPL to your portfolio only based on positive price movements? Let us delve deeper and find out the factors that can help investors decide whether it is a good entry point to add PPL stock to their portfolios.

Factors Acting as Tailwinds for PPL Stock

PPL Corporation’s subsidiaries are benefiting from economic growth in their service territories, supported by rising demand from data centers. This trend is driving notable load growth for the company. In Pennsylvania, around 25.2 gigawatts (“GW”) of potential data center demand is currently in advanced stages, up from 20.5 GW. In the Kentucky segment, the economic development queue indicates potential load growth of 9.3 GW through 2032, compared with 8.5 GW earlier.

PPL Corporation expects to invest $23 billion during 2026-2029. These investments are expected to result in a nearly 10.3% average annual rate base growth through 2029. The company benefits from its strong focus on generation, transmission and distribution projects. PPL Corporation’s ongoing infrastructure improvements have helped significantly reduce power outages for customers.

Its subsidiary, PPL Electric Utilities, is also working to enhance the reliability of electricity supply by using Dynamic Line Rating (“DLR”) technology. PPL Electric was the first U.S. utility to integrate this technology into real-time and market operations. DLR sensors provide real-time information that enables the company to better utilize its existing transmission line capacity and reduce congestion on the grid.

More than 60% of PPL’s capital investment plan is subject to “contemporaneous recovery,” which reduces the impact of regulatory lag on earnings for investments. The recovery of capital expenditures quickly allows the company to fund long-term projects easily.

PPL is focused on reducing total operating expenses, which will benefit its customers. The company has already lowered its expenses by $170 million in 2025 from the 2021 level. PPL expects to continue with its cost management initiatives, which will further boost margins.

PPL Stock’s Earnings Estimate Moving Up

PPL expects 2026 earnings to be $1.90-$1.98 per share. The Zacks Consensus Estimate for PPL’s 2026 and 2027 earnings per share indicates year-over-year growth of 7.73% and 8.35%, respectively.

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The consensus estimate for Dominion Energy’s earnings per share for 2026 and 2027 indicates year-over-year growth of 5.26% and 6.07%, respectively.

PPL’s Capital Return Programs

The company has been distributing dividends to shareholders for a long time and plans to increase the annual dividend in the range of 4-6% over the long-term, subject to the approval of its board of directors. The company’s current quarterly dividend rate is 28.5 cents, resulting in an annual dividend of $1.14 per share. The current dividend yield is 2.96% better than the S&P 500 group’s yield of 1.47%.

PPL has raised dividends for its shareholders five times in the past five years. Check PPL’s dividend history here.

Another utility, Duke Energy Corporation DUK, operating in the same space, has been investing regularly to provide high-quality services to its customers. Duke Energy has raised dividends for its shareholders five times in the past five years. The current annual dividend rate of Duke Energy is $4.26 per share, reflecting a dividend yield of 3.20%.

PPL Stock Trades at a Premium

PPL Corporation is currently valued at a premium compared with its industry on a forward 12-month P/E basis. The stock is trading at P/E F12M of 19.44X compared with its industry’s 16.74X.

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Duke Energy is currently trading at a P/E F12M of 19.59X, also a premium to its industry’s current valuation.

PPL Stock Returns Lower Than the Industry

PPL’s trailing 12-month return on equity (“ROE”) of 9.29% is lower than the industry average of 10.77%. ROE, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.

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Wrapping Up

PPL is well-positioned to benefit from increasing energy demand across service areas, while its cost-saving initiatives are expected to continue supporting margin expansion.

Additionally, the company’s ability to recover more than 60% of its capital expenditures in real time provides flexibility to efficiently fund long-term projects.

The new investors can add this regular dividend distributor to their portfolio, which currently carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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PPL Corporation (PPL): Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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