BMO Capital cuts Ameren stock price target on valuation to $113

BMO Capital has reduced its price target for Ameren Corp. (NYSE:AEE) stock from $119 to $113, while keeping an Outperform rating. The company's shares are currently trading at $105.87. BMO Capital believes the stock may be overvalued compared to its estimated Fair Value. Their EPS estimate for the third quarter of 2026 is $2.31, which matches the consensus of $2.29 from FactSet and Bloomberg.

This represents a 6.5% year-over-year increase, driven by favorable weather conditions. Ameren management is expected to raise its long-term EPS compound annual growth rate to 7-9%, with guidance of $5.70 to $5.90 per share for 2027, marking an 8.4% increase from the midpoint to midpoint. The stock trades at a low P/E ratio of 18.35, with a PEG ratio of 0.75.

Ameren has raised its dividend for 13 consecutive years, offering a yield of 2.88%. The company's capital plan, valued at $38.5 billion to $40 billion, aims for an approximately 11.6% CAGR in rate base from 2026 to 2031. Ameren's pipeline of Missouri projects with completed interconnection studies could bolster the sustainability of this plan.

Additionally, Ameren recently sold $900 million of junior subordinated notes due in 2057, raising net proceeds of $891 million before expenses. Ameren Corporation also updated its long-term earnings per share growth outlook to 6-8% during its third-quarter call, following a strong second-quarter performance where adjusted earnings per share reached $1.13, surpassing consensus estimates.