PNM Resources' (PNM) Clean Energy Goals & CAPEX Bode Well
PNM Resources' (PNM) focus on generating green energy and its planned investments are likely to fortify its operations further.
PNM Resources, Inc.’s PNM strategic infrastructure-related investments and efforts to provide reliable and affordable clean power will enhance its existing performance. Also, the company’s adequate liquidity will allow it to meet its debt obligations.
The company has a trailing four-quarter earnings surprise of 8.53%, on average. Its long-term (three-five years) earnings growth rate is pegged at 5.18%. In the past year, shares of this presently Zacks Rank #3 (Hold) company have gained 14.1%, outperforming the industry’s rise of 12.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One-Year Price Performance
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What’s Driving the Stock?
PNM Resources continues to invest substantially in its utility assets for providing reliable services to its customers. The company plans to invest $3.98 billion during the 2021-2025 forecast period, which will help it enhance its earnings.
In New Mexico, the utility received approvals from both the Federal Energy Regulatory Commission and the New Mexico Public Regulation Commission to acquire the Western Spirit Transmission Line. Construction of the project started at the beginning of this year. We note that the company will play an important role with its expanding transmission assets in the region.
The utility is also steadily taking measures to increase its renewable and battery storage capacity, thus moving toward clean energy. To this end, PNM Resources is focused on exiting coal-fired generation by 2024 and targets an emission-free portfolio by 2040 to bring cleaner energy sources to its production portfolio. The goal of the company is to become carbon neutral before 2045. Also, it plans to replace 114 MW of leased capacity at the Palo Verde Nuclear Generating Station with solar and storage resources. Other utilities like Duke Energy DUK, DTE Energy DTE and Xcel Energy XEL are too making efforts to supply clean energy.
The company boasts sufficient liquidity to meet its near-term obligations and fund capital investments despite the ongoing economic crisis.
However, the risk involved in operating at nuclear plants apart from abiding by the climate change-related stringent environmental policies and regulations remains a headwind to the company.
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