| Friday | ||||
ALLETE announced that its… ALLETE announced that its Board of Directors has increased the quarterly dividend on the company's common stock to 67.75c per share, a 4.2% increase. On an annual basis the increased dividend is equivalent to $2.71 per share. The regular quarterly dividend is payable Mar. 1 to common shareholders of record at the close of business Feb. 15. | ||||
| Over a week ago | ||||
The Minnesota Public… The Minnesota Public Utilities Commission approved a rate increase of approximately $59M, or approximately 9%, that Minnesota Power, a utility division of ALLETE Inc., is allowed to recover through the base rates that it charges to residential and business electric customers. The commission also authorized a return on equity of 9.65% for the company. The decision is subject to a final written order and reconsideration. Under the MPUC decision, rates will increase by approximately 9% for all customer classes. The average residential customer's monthly bill will increase by approximately 2% above the interim rate they currently pay. The 9% increase will also apply to business and industrial customers, whose interim rate was 14%. The applicable difference between final and interim rates will be refunded to business and industrial customers. Final rates are expected to go into effect this summer. As a regulated utility, Minnesota Power must receive approval from the MPUC whenever changes in revenue or expenses require adjusting its rates. In the past 25 years, Minnesota Power has completed only three full rate reviews, and its residential customers' monthly bills are below the national average while they receive the highest percentage of renewable energy in the state. The company's last rate review filed in 2019 was withdrawn in response to the COVID-19 pandemic and its impacts on customers and the region's economy. | ||||
Mizuho analyst Anthony… Mizuho analyst Anthony Crowdell lowered the firm's price target on Allete to $64 from $66 and keeps a Neutral rating on the shares after the Minnesota Public Utilities Commission ruled on the Minnesota Power rate case. The decision underscores the ongoing regulatory trend around the country as regulators prioritize customer affordability and push back against bill increases, the analyst tells investors in a research note. | ||||
Guggenheim analyst… Guggenheim analyst Shahriar Pourreza is downgrading and upgrading some names in the utilities and power sector in conjunction with the firm's 2023 outlook, stating that it the "turbulent end to 2022 has shifted our stance on the sector and investment allocation for 2023." If an investor "had to own 1 utility in 2023," the firm contends that should be FirstEnergy (FE), which was upgraded to Buy from Neutral with a price target of $46, up from $34, and moved to the firm's Best Idea list, replacing PG&E (PCG). The firm is taking a "value" bend, as it argues that valuation dispersions "can be an opportunity for both upsides and downsides" if investors are nervous about next year's EPS numbers, long-term growth revisions, regulatory risks, and headwinds to company guidance. In that context, Guggenheim also upgraded One Gas (OGS) to Neutral from Sell with a price target of $77, up from $64. The firm downgraded three stocks to Neutral: Ameren (AEE), CenterPoint Energy (CNP), and OGE Energy (OGE). It also downgraded three to Sell: Allete (ALE), Alliant Energy (LNT), and NorthWestern Energy (NWE). | ||||
Guggenheim analyst… Guggenheim analyst Shahriar Pourreza downgraded Allete to Sell from Neutral with a price target of $54, up from $53. | ||||
| Over a month ago | ||||
Wells Fargo analyst Neil… Wells Fargo analyst Neil Kalton raised the firm's price target on Allete to $67 from $60 to reflect higher peer group multiples since his last update, while keeping an Equal Weight rating on the shares. His outlook for the sector is not as bullish heading into 2023, nor is he outright bearish. | ||||
Mizuho analyst Anthony… Mizuho analyst Anthony Crowdell raised the firm's price target on Allete to $65 from $50 and keeps a Neutral rating on the shares after hosting meetings with management. Management highlighted opportunity for greater transmission spending due to the large buildout of renewable generation in their service territory, Crowdell tells investors in a research note. The analyst upped the target to reflect current market multiples. | ||||
JPMorgan analyst Richard… JPMorgan analyst Richard Sunderland upgraded Allete to Neutral from Underweight with an unchanged price target of $65 post the Q3 results. The analyst sees "growing tailwinds" to the company's regulated outlook. He anticipates greater utility competitiveness from the Inflation Reduction Act will improve MN Power's probability of success. | ||||
BofA analyst Julien… BofA analyst Julien Dumoulin-Smith upgraded Allete to Buy from Neutral with a price target of $66, up from $53. The analyst cites the company having rolled forward its long-run capital plan now targeting $2.7B in aggregate investment over 2023-2027, an increase from $1.8B in the previous iteration, which should drive inflection for its shares. Dumoulin-Smith further cites the Minnesota commission having approved Allete's enhanced Integrated Resource Plan with a "constructive settlement" reached with interveners that should add 400 MW wind and 300 MW solar within the forecast period. | ||||
BofA analyst Julien… BofA analyst Julien Dumoulin-Smith upgraded Allete to Buy from Neutral with a price target of $66, up from $53. | ||||
