Dominion Energy to Report Q4 Earnings: Buy, Sell or Hold the Stock?

Core Viewpoint - Dominion Energy is set to report its fourth-quarter 2025 results on February 23, with earnings per share (EPS) estimated at 64 cents and revenues projected at $3.56 billion, reflecting a year-over-year revenue increase of 4.78% despite a 5.88% decrease in earnings estimates over the past 60 days [1][4]. Earnings Performance - Dominion Energy has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 12.72% [2]. Earnings Prediction Model - The current model does not predict an earnings beat for Dominion Energy this quarter, as it has an Earnings ESP of -2.48% and a Zacks Rank of 4 (Sell) [3][5]. Factors Influencing Q4 Results - Expected improvements in fourth-quarter sales volumes are attributed to strong demand from data centers and robust returns from regulated investments, alongside the absence of a scheduled refueling outage at Millstone Power Station [7]. - However, increased financing expenses, contracted energy prices, lack of Nuclear PTC, share dilution, and timing of operation and maintenance expenses may offset these positive factors [8]. Financial Metrics - Dominion Energy's trailing 12-month return on equity (ROE) stands at 9.6%, which is below the industry average of 10.7%, indicating less efficient use of shareholders' equity compared to peers [9]. - The company's shares have appreciated by 6.5% over the past three months, outperforming the Zacks Utility – Electric Power industry, which rose by 1.6% [11]. Valuation - Dominion Energy is currently trading at a premium valuation of 18.03X on a forward 12-month P/E basis, compared to the industry average of 16.75X [13]. Investment Strategy - The company plans to invest nearly $50 billion from 2025 to 2029 to enhance its operations, aiming for increased renewable energy capacity by over 15% annually over the next 15 years [15]. - Despite the positive outlook from rising demand and planned investments, weaker energy margins and rising operational costs may temper some of the benefits [16]. Overall Performance - Dominion Energy is expected to maintain stable performance driven by increasing demand for clean energy, particularly in Virginia and South Carolina, although challenges such as share dilution and lower contracted energy margins may impact quarterly results [19].