B of A Securities upgrades Black Hills' rating to Neutral with a new PT of $64.

B of A Securities upgrades Black Hills' rating to Neutral with a new PT of $64.

July 02, 2025

In a recent development, B of A Securities has upgraded Black Hills' (NYSE: BKH) rating to Neutral with a new price target (PT) of $64. This move comes amidst a backdrop of significant industry developments and financial performance metrics that have been closely watched by analysts and investors.

Black Hills, a leading utility company, has been the subject of considerable interest in recent months due to its merger with NorthWestern Energy (NWE). The merger, announced on August 19, 2025, aims to create a regional electric and natural gas utility company with a combined enterprise value of $15.4 billion. The combined entity will serve over two million customers across eight U.S. states, leveraging the strengths of both companies.

The merger has been seen as a strategic move to enhance operational efficiency and expand market reach. Black Hills investors will own 56% of the combined company, while NorthWestern shareholders will hold around 44%. The transaction, expected to close in a tax-free all-stock format, reflects a 4% premium based on the average stock prices since discussions began in March 2025.

Analysts have been closely monitoring Black Hills' financial performance and market dynamics. The company has shown resilience in its financial metrics, with revenue and earnings surpassing competitors like PNM Resources (NYSE: PNM). Black Hills' higher revenue and earnings, coupled with a lower price-to-earnings ratio, have positioned it as a more affordable investment option compared to its peers [1].

In terms of valuation and earnings, Black Hills has been favorably compared to PNM Resources. While PNM Resources has a consensus target price of $51.08 with a potential upside of 14.11%, Black Hills' target price stands at $61.67, suggesting a potential upside of 14.84%. This indicates that analysts are more bullish on Black Hills' prospects [1].

The media sentiment surrounding Black Hills has also been positive, with a higher average media sentiment score of 0.79 compared to PNM Resources' score of 0.86. This positive media sentiment, coupled with strong institutional ownership and a history of consistent dividend growth, has contributed to the upgrade in rating by B of A Securities [1].

The upgrade to Neutral from B of A Securities reflects a balanced view of Black Hills' current position and future prospects. While the merger with NorthWestern Energy presents significant opportunities for growth, the market's reaction to the merger and the overall economic conditions will be crucial factors influencing Black Hills' stock performance.

References:
[1] https://www.marketbeat.com/stocks/NYSE/BKH/competitors-and-alternatives/
[2] https://finance.yahoo.com/video/northwestern-energy-black-hills-merge-182048468.html
[3] https://www.power-technology.com/news/black-hills-northwestern-merge-7-8bn-company/