Alliant Energy Earnings: Constructive Regulation With Strong Leadership

We are maintaining our Alliant Energy LNT $58 per share fair value estimate after the company reported third-quarter operating earnings per share of $1.05, compared with $0.93 in the same year-ago period. Management narrowed 2023 EPS guidance to $2.85 to $2.93, from $2.82 to $2.96. Our $2.90 per share estimate remains unchanged.

The company initiated 2024 EPS guidance of $2.99 to $3.13, an implied 6% increase and consistent with the company’s long-term 5% to 7% earnings growth target. We think the company can achieve the high end of that growth range. Alliant trades at a 13% discount to our fair value estimate as of Nov. 2, offering investors an opportunity to buy at an attractive price a high-quality utility operating in constructive regulatory jurisdictions with good management execution.

Alliant expects to pay a dividend of $1.92 per share in 2024, a 6% increase from $1.81 in 2023. We expect dividend growth in line with our earnings growth forecast.

Alliant’s 2024-27 capital investment plan supports our earnings growth forecast. Management increased its capital investment plan to $9.1 billion, up from its previous four-year plan totaling $8.5 billion. The increase is attributable to wind repowering opportunities, grid modernization, and additional transmission opportunities at minority-owned ATC.

We continue to view Alliant’s main two regulatory environments, Iowa and Wisconsin, constructively. Alliant received advanced ratemaking on 400 megawatts of solar at an above-average 10.25% allowed return on equity. In Wisconsin, we expect Alliant to secure a constructive outcome in its pending rate case similar to the terms that peer Wisconsin utility WEC Energy receive in its recent rate decision.

President and COO Lisa Barton will become CEO effective Jan. 1. We think Barton is an excellent choice, given her extensive experience in executive positions at American Electric Power before joining Alliant in early 2023.