Barclays has stated that it is “too soon to be bullish” on the U.S. power and utilities sector, but sees several positive factors that can benefit large-cap value stocks within the industry. In a coverage initiation report, Barclays analyst Nicholas Campanella highlighted the sector’s potential long-term benefits from decarbonization strategies, electrification, electric vehicles, and increased capital spending. The report named PG&E, Duke Energy, American Electric Power, and Pinnacle West Capital as the best-positioned companies with an overweight rating. For diversified utilities, Barclays expressed bullishness towards AES Corp and Sempra. At the small-cap level, Barclays rated OGE Energy as overweight and NorthWestern as underweight. The bank also has a positive view on DTE Energy, while being cautious on CenterPoint Energy and WEC Energy due to their leverage profiles and breadth of general rate case exposure.
Barclays’ coverage initiation report on the U.S. power and utilities sector acknowledges the potential benefits of long-term industry trends. The sector is expected to benefit from decarbonization efforts and the increasing focus on electrification and electric vehicles. Additionally, the report highlights the sector’s robust capital spending trajectory, driven in part by the Inflation Reduction Act. While Barclays maintains a neutral view on the industry as a whole, it sees opportunities for value large-cap stocks. PG&E, Duke Energy, American Electric Power, and Pinnacle West Capital are identified as the best-positioned companies within this category.
Barclays also provides ratings and outlooks for other companies in the power and utilities sector. AES Corp and Sempra receive a bullish rating among diversified utilities, while OGE Energy is rated overweight among small-cap stocks. The report mentions a positive view on DTE Energy, as well as caution towards CenterPoint Energy and WEC Energy due to their leverage profiles and exposure to general rate cases. The overall coverage initiation report by Barclays offers insights into the dynamics of the U.S. power and utilities sector and provides a comprehensive analysis of individual companies within the industry.
