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PPL Rides on Capital Investment Plans & Focus on Clean Energy

PPL's focus on emission reduction, systematic investments and ramped-up homegrown activities act as tailwinds.

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This story originally appeared on Zacks

PPL Corporation’s PPL planned investments in strengthening infrastructure, increased focus on cleaner energy generation and growth in domestic operation are likely to enhance its existing operations.

The Zacks Consensus Estimate for PPL’s 2021 and 2022 earnings is pegged at $1.17 and $1.53 per share, respectively. In the past month, shares of PPL Corp. have lost 4.8% compared with the industry’s fall of 2.2%. PPL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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One-Month Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

What’s Driving the Stock?

PPL Corp.’s capital investment plan primarily focuses on its infrastructure-construction projects for generation, transmission and distribution. PPL divested its U.K. utility business to National Grid in June 2021. In the first quarter of 2021, PPL inked a deal to buy the Narragansett Electric Company, a Rhode Island-based utility business, from National Grid.

The buyout is expected to be completed by March 2022. These deals will simplify PPL’s business mix and provide greater financial flexibility to prevent exposure to foreign currency risks.

PPL Corp. aims to reduce carbon emission by 70% within 2035 instead of 2040 and 80% within 2040 instead of 2050 by introducing a carbon capture technology and adding more renewable sources to its generation portfolio. PPL also aims to become carbon-neutral by 2050.

Other electric utilities also adopting measures to supply clean and reliable energy to their customers are Duke Energy DUK, DTE Energy DTE and Alliant Energy LNT. While DUK and DTE carry a Zacks Rank of 3 at present, LNT holds a Zacks Rank #2 (Buy). All three stocks are planning to provide absolute clean energy by 2050.

DTE Energy remains committed to slashing carbon emissions of its electric utility operations by 32% within 2023, 50% by 2030 and 80% by 2040 from the 2005 carbon emissions levels. Duke Energy plans to trim carbon footprint between approximately 55% and 75% through 2035. Alliant Energy intends to retire all its existing coal-fired generation units by 2040 to lower emissions from the 2005 baseline by 50% within 2030.

Woes

Unplanned outages at power plants may increase PPL Corp.’s expenses. Postponement of projects or failure to recover costs may weigh on its finances. Stringent laws and regulations may hurt PPL’s revenues.



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PPL Corporation (PPL): Free Stock Analysis Report

 

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