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PPL Stock Outperforms its Industry in Six Months: How to Play?
PPLPPL(PPL) ZACKS·2025-04-14 16:50

Core Viewpoint - PPL Corp. has outperformed the Zacks Utility-Electric Power industry and the Zacks Utilities sector, with a 9.4% increase in shares over the last six months, while the industry declined by 2.8% [1][3]. Investment and Infrastructure - PPL plans to invest 20billionthrough2027toupgradeitsinfrastructure,reduceoutages,andloweritscarbonfootprint[2][10].−Thecompanyfocusesoncapital−intensiveprojectsforgeneration,transmission,anddistribution,whichhaveresultedinfeweroutagesforcustomers[10][9].−Over6020 billion through 2027 to upgrade its infrastructure, reduce outages, and lower its carbon footprint [2][10]. - The company focuses on capital-intensive projects for generation, transmission, and distribution, which have resulted in fewer outages for customers [10][9]. - Over 60% of PPL's capital investment plan allows for "contemporaneous recovery," minimizing regulatory lag on earnings [11]. Emission Reduction Initiatives - PPL aims to reduce carbon emissions by 70% by 2035 and 80% by 2040 from 2010 levels, aligning with international climate goals [12]. - The company plans to achieve carbon neutrality by 2050 through new carbon capture technology and increased renewable energy sources [13][14]. Cost Management - PPL is targeting a reduction of operating and maintenance costs by at least 175 million through 2026, with 130millioninsavingsalreadyachievedin2024[16].−Thecompanyisimplementingscalabletechnologiestofurtherreduceexpenses,whichisexpectedtoenhancemarginsandsupportearningsgrowth[17].EarningsandShareholderValue−PPLexpectsearningspershare(EPS)of130 million in savings already achieved in 2024 [16]. - The company is implementing scalable technologies to further reduce expenses, which is expected to enhance margins and support earnings growth [17]. Earnings and Shareholder Value - PPL expects earnings per share (EPS) of 1.75-1.87for2025,withaconsensusestimateof1.87 for 2025, with a consensus estimate of 1.82, indicating year-over-year increases of 7.69% and 7.82% for 2025 and 2026, respectively [18]. - The current annual dividend is $1.09, with projected growth of 6-8% per year through 2027, consistent with earnings growth expectations [19][20]. Valuation - PPL is currently trading at a premium with a forward 12-month P/E ratio of 18.66, compared to the industry average of 13.96 [21]. - The company is expected to benefit from rising energy demand and cost-saving initiatives, which will enhance margins [26].