Ladenburg Thalmann upgrades Alliant Energy stock to Buy, cites revenue from Iowa settlement

On Tuesday, Alliant Energy Corporation (NASDAQ:) received an upgrade from Neutral to Buy by Ladenburg Thalmann, with a new price target set at $62.50, a notable increase from the previous $50.00. The upgrade is based on the anticipated earnings upside from the company’s recent Iowa settlement.

The optimism from Ladenburg Thalmann stems from the agreement that allows Interstate Power, a part of Alliant Energy, to retain revenues and tax credits from AI/data center load for the next five years. This retention is contingent on the approval of the Iowa Utilities Board (IUB). The analyst pointed out that since the settlement’s announcement, a number of business groups have supported the agreement, which could lead to it being adopted by the IUB with few if any changes.

The settlement is significant as it could lead to substantial capital spending additions that are not currently included in Alliant Energy’s capital expenditure forecast. This potential for increased capital spending is a key factor in the analyst’s positive outlook on the stock.

The terms of the settlement offer Alliant Energy an opportunity to enhance its financial performance by capitalizing on the additional revenues and tax credits. The support from various business groups also suggests a favorable view of the settlement, which could influence the IUB’s decision.

In other recent news, Alliant Energy has been the focus of recent developments. BMO Capital Markets revised its outlook on Alliant Energy, raising the stock price target from $58.00 to $60.00 while maintaining a Market Perform rating.

This followed Alliant Energy’s second-quarter earnings report, which showed earnings per share (EPS) of $0.57, falling short of the $0.67 and $0.64 anticipated by BMO Capital and the wider analyst consensus, respectively.

Despite the EPS shortfall, attributed to the timing of income tax expenses, Alliant Energy confirmed its full-year EPS guidance for 2024, projecting a range between $2.99 and $3.13. The company also reported a $20 million decrease in adjusted operations and maintenance expenses compared to the previous year, and an increase in cash flows from operations by approximately $250 million, primarily due to rate increases and working capital improvements.

Alliant Energy has also highlighted a partial settlement in their Iowa rate review and agreements with data centers. The company is set to provide updates on load growth, the timing of that growth, and the necessary resources and capital expenditures to support it in an upcoming November briefing.

BMO Capital’s stance of Market Perform suggests a neutral perspective on Alliant Energy’s potential, indicating that the company’s shares may perform in line with the broader market or sector averages.

InvestingPro Insights

In light of the recent upgrade by Ladenburg Thalmann, Alliant Energy Corporation (NASDAQ:LNT) shows promising financial stability and growth potential as reflected in key metrics from InvestingPro. With a solid market capitalization of $14.35 billion and a price-to-earnings (P/E) ratio of around 22.97, Alliant Energy demonstrates a strong presence in the market. The company’s commitment to shareholder returns is evident with a dividend yield of 3.43% and a remarkable track record of increasing its dividend for 54 consecutive years, a testament to its financial health and management’s confidence in sustained profitability.

InvestingPro Tips highlight that Alliant Energy has maintained low price volatility, which may appeal to conservative investors seeking steady performance. Additionally, the company’s profitability over the last twelve months and analysts’ predictions for continued profitability this year further support the optimistic outlook presented by the recent upgrade. It’s worth noting that while short-term obligations exceed liquid assets, the company’s long-term financial commitments, such as consistent dividend payments, reflect a strategic approach to financial management.

For those interested in a deeper analysis, InvestingPro offers additional tips on Alliant Energy, providing a comprehensive view of the company’s financial position and future outlook. To explore further, visit https://www.investing.com/pro/LNT for more InvestingPro Tips on Alliant Energy Corporation.

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