Skip to Content

WEC Energy Group Inc WEC

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

WEC Energy Group Posts Strong Second Quarter, Increases Full-Year Guidance

Andrew Bischof, CFA, CPA Senior Equity Analyst

Analyst Note

| Andrew Bischof, CFA, CPA |

We are increasing our WEC Energy fair value estimate to $92 per share, up from $91, after it reported second-quarter earnings of $0.87 per share, up from $0.76 in the same year-ago period.
 
Management increased its 2021 operating earnings guidance to $4.02 to $4.05 per share from $3.99 to $4.03 and expects to deliver at the top end of the range. We continue to expect management to achieve the top half of its 5% to 7% earnings growth target. We raised our full-year earnings expectations. Time-value appreciation since our last update led to our fair value increase.
 
Revenue for the quarter totaled $1.7 billion, up $128 million from the same year-ago quarter. Revenue was aided by warmer-than-normal weather, continued economic recovery, and operating efficiencies. Retail deliveries of electricity were up 7.1% year over year compared with the pandemic peak when stay-at-home orders were prevalent. Strong industrial and commercial growth was partially offset by a decline in residential usage.
 
The company's regulatory activity should be relatively quiet this year after the company proposed a one-year stay-out at its Wisconsin utilities. This preserves the company's current allowed return on equity across its three utilities ranging from 10%-10.35%, among the highest of its peer group. If the state commission approves the company's proposal, WEC's Wisconsin utilities would next file a rate review in early 2022. We continue to expect Wisconsin will be a best-in-class regulatory environment.
 
The company's infrastructure investments have higher returns than WEC's regulated business with regulated utility-type risks. In late July, WEC announced it will pay Invenergy $412 million for a 90% interest in a 250 MW, 64-turbine wind farm to be completed at the end of next year. WEC has set aside $1.5 billion in its five-year capital investment budget for renewable energy, nearly doubling its $2.2 billion portfolio.

Read Full Analysis

Company Profile

Business Description

WEC Energy Group's electric and gas utility businesses serve electric and gas customers in its Illinois, Michigan, Minnesota, and Wisconsin service territories. The company also owns a 60% stake in American Transmission Co. WEC's asset mix is approximately 51% electric generation and distribution, 34% gas distribution, 13% electric transmission, and 2% unregulated renewable generation.

Contact
231 West Michigan Street, P.O. Box 1331
Milwaukee, WI, 53201
T +1 414 221-2345
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 7,273

Related