PPL to Release Q4 Earnings: Time to Buy, Hold or Sell the Stock?

Core Insights - PPL Corporation (PPL) is anticipated to report its fourth-quarter 2025 results on February 20, with earnings expected to rise by 23.53% year-over-year to 42 cents per share and revenues projected to increase by 5.76% to $2.34 billion [1][6]. Financial Estimates - The Zacks Consensus Estimate for PPL's earnings per share (EPS) for the current quarter is 0.42, with a range of estimates from 0.41 to 0.42 [2]. - For the next quarter, the EPS estimate is 0.61, with a high estimate of 0.63 and a low of 0.57 [2]. - The current year EPS estimate stands at 1.82, reflecting a year-over-year growth of 7.69%, while the next year is projected at 1.95, indicating a growth of 7.54% [2]. Earnings Surprise History - PPL has beaten the Zacks Consensus Estimate in two of the last four quarters, resulting in a negative average surprise of 1.02% [3]. Earnings Prediction Model - The current Earnings ESP for PPL is 0.00%, and it holds a Zacks Rank of 3 (Hold), indicating that the model does not predict an earnings beat this time [5]. Key Factors Influencing Q4 Results - PPL's performance is likely to benefit from ongoing cost reduction initiatives, energy efficiency programs, and increased demand from data centers in Pennsylvania and the private sector in Kentucky [8][9]. - The expected return on capital investment in the latter half of 2025 is also anticipated to contribute positively to fourth-quarter earnings [8]. Stock Performance - Over the past three months, PPL's stock has returned 2.8%, outperforming the industry growth of 1.7% [12]. - PPL is trading at a forward price-to-earnings ratio of 19.16X, which is higher than the industry average of 17.17X [13]. Return on Equity - PPL's trailing 12-month return on equity (ROE) is 9.08%, which is below the industry average of 10.7% [15]. Investment Considerations - PPL plans to invest $20 billion from 2025 to 2028, focusing on infrastructure construction across generation, transmission, and distribution assets, which is expected to enhance system reliability [16]. - The company operates in a favorable regulatory environment, with over 60% of its capital investment plan eligible for contemporaneous recovery, mitigating the impact of regulatory lag on earnings [17]. - PPL has implemented common design and operational standards across its utilities to improve service resilience and efficiency in meeting rising customer demand [18]. Summary - PPL Corporation is positioned to benefit from rising demand, cost savings initiatives, and infrastructure upgrades, with strong liquidity and ongoing grid modernization serving as key tailwinds [19].