Wall Street analysts maintain 'Moderate Buy' consensus for CenterPoint Energy despite underperformance
CenterPoint Energy shares rose 10.5% over the past 52 weeks, significantly trailing the S&P 500, yet analysts project an 11.2% upside with a mean price target of $46.38.
Houston-based utility CenterPoint Energy (CNP) continues to trade with a "Moderate Buy" consensus from Wall Street analysts, even as the stock underperforms the broader market over the last year. While shares have gained 10.5% over the past 52 weeks, this figure pales in comparison to the S&P 500's 30.4% rally during the same period. The utility has also lagged the Utilities Select Sector SPDR ETF (XLU), which surged 12.6% in the same timeframe, although CNP has managed to outperform the ETF on a year-to-date basis.
Despite the relative weakness against major indices, the company reported adjusted earnings per share of $0.56 for the first quarter, representing a 5.7% increase year-on-year. This growth was driven primarily by business expansion and regulatory recovery, which contributed $0.11 per share. However, these gains were partially offset by a $0.02 per share impact from unfavourable weather and usage trends, as well as higher interest expenses amounting to $0.04 per share.
The first quarter results also reflected the financial impact of strategic restructuring, with a $0.03 unfavourable variance attributed to the divestiture of natural gas local distribution company businesses in Louisiana and Mississippi. This sale was completed in the first quarter of 2025, marking a shift in the company's operational footprint. Following the release of these weaker-than-expected results on 23 April, shares of CNP surged 2.5%, suggesting that investors remain focused on the company's long-term fundamentals rather than short-term misses.
Analyst sentiment remains cautiously optimistic, with a consensus rating of "Moderate Buy" among the 18 analysts currently covering the stock. The configuration is slightly more bullish than it was a month ago, with eight analysts suggesting a "Strong Buy" rating alongside nine "Strong Buy" and nine "Hold" ratings. For the current fiscal year ending in December, analysts expect CNP's earnings per share to grow 8.5% year-on-year to $1.91.
On 4 May, Evercore Inc. maintained an "In Line" rating on the stock and raised its price target to $45. This move brings the mean price target among analysts to $46.38, implying an 11.2% premium to current price levels. The Street-high price target stands at $50, which suggests a potential upside of 19.8% from where the stock is trading. While the company has missed consensus estimates in three of the last four quarters, the current outlook suggests a measured recovery in investor confidence.
