BMO cuts Xcel Energy stock price target on valuation review

BMO lowered its price target on Xcel Energy (XEL) shares to $86, down from $91, while keeping an Outperform rating. This adjustment implies a potential 13% upside from the current share price of $76.18. According to InvestingPro, Xcel Energy is currently undervalued. The firm forecasts third-quarter 2026 earnings per share at $1.40, surpassing FactSet and Bloomberg median estimates of $1.38 and $1.37, respectively.

BMO anticipates Xcel Energy's updated five-year capital plan to surpass $73 billion, supporting rate base growth above 12% using a 2027 benchmark. The company is expected to achieve EPS growth of around 10% through 2031, driven by proactive financing strategies and anticipated improvements in equity returns from rate relief. Xcel Energy shares are currently trading at roughly a 4% discount to peer utilities, despite being seen as having best-in-class growth prospects.

The analysis highlights the company's 55-year streak of consecutive dividend payments and 6 analysts revising their earnings upwards for the upcoming period. The stock currently yields 3.15% and has a P/E ratio of 20.58. The $86 price target is based on a mark-to-market and sum-of-the-parts valuation. Xcel Energy reported adjusted earnings per share of $0.93 in Q2 2026, beating consensus estimates of $0.79, and reaffirmed its 2026 guidance.

Mizuho raised its price target for Xcel Energy to $92 from $91, maintaining an Outperform rating, while Jefferies adjusted its target to $99 from $101, keeping a Buy rating. Xcel Energy has also expanded its use of mobile EV charging systems by ordering three additional units from Xos Inc., enhancing its fleet vehicle charging capabilities in Colorado.

Goldman Sachs updated its utility estimates, considering warmer weather and higher interest rates impacting regulated utilities. Bank of America's mid-quarter review showed that 12 out of 14 covered utilities companies exceeded earnings estimates, demonstrating sector resilience.