Duke Energy Stock Falls 6.1% in Three Months: What Should You Do?

Core Viewpoint - Duke Energy (DUK) shares have declined 6.1% over the past three months, underperforming the Zacks Utility-Electric Power industry's decline of 1.4, indicating financial pressure from rising leverage and interest expenses [1][7]. Financial Performance - Duke Energy's long-term debt increased to $79.3 billion as of September 30, 2025, from $76.34 billion at the end of 2024, leading to higher financing costs with interest expenses rising nearly 7% year over year to $2.69 million during the first nine months of 2025 [4][7]. - The company's total debt to capital ratio stands at 61.97%, which is higher than the industry's average of 61.13% [13]. - Duke Energy's current ratio is 0.63, indicating potential struggles to meet short-term obligations as current liabilities exceed current assets [14]. Industry Comparison - Other operators in the industry, such as NextEra Energy (NEE) and DTE Energy (DTE), also face risks from higher debt levels, with NEE's long-term debt rising to $84.17 billion and DTE's to $24.5 billion as of September 30, 2025 [2]. - Shares of NEE and DTE have declined 1.1% and 9.2%, respectively, over the past three months [2]. Weather Impact - Unfavorable weather events, including hurricanes, have caused significant outages and infrastructure damage, with restoration costs totaling nearly $789 million as of September 30, 2025 [5][8]. Growth and Transition - Duke Energy is advancing its clean-energy transition by planning to reduce coal generation to under 5% by 2030 and eliminate it by 2035, supported by retiring 58 coal units totaling 8,000 megawatts [10]. - The company aims to achieve net-zero methane emissions by 2030 and net-zero carbon emissions by 2050, with plans to add over 7,500 megawatts of new, lower-emission natural gas generation by 2030 [10]. Dividend and Profitability - Duke Energy's annual dividend is $4.26 per share, with a current dividend yield of 3.65%, outperforming the industry's average of 2.92% [15]. - The company's trailing 12-month return on equity (ROE) is 9.98%, lower than the industry average of 10.3%, indicating less effective utilization of shareholders' funds [17]. Valuation - Duke Energy is currently trading at a forward P/E ratio of 17.41X, which is a premium compared to the industry's 15.51X [18].