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Dominion Energy (NYSE:D) -0.9% in Monday’s trading as BMO Capital downgrades shares to Market Perform from Outperform with a $49 price target, after recently guiding its full-year earnings forecast below Wall Street expectations.
While Dominion (D) largely achieved the objectives outlined with the launch of its strategic review in November 2022, “at an in-line multiple on 2026 earnings per share (excluding 45Z credits), we believe additional multiple rerating in the stock could be longer-dated and beyond investors’ current time horizon,” BMO’s James Thalacker writes.
“We believe investors’ propensity will be to place a relative discount on shares for three primary risks: (1) cost and timing execution on CVOW; (2) regulatory execution largely related to the next biennial review in Virginia and the minority interest sale in CVOW; and (3) meeting the company’s stated 5%-7% EPS growth, [which] likely makes it hard for investors to see the urgency in owning Dominion (D) over the next 12 months given an implied flat multiple to utility peers on [estimated] 2026 earnings,” according to Thalacker.
The analyst’s refreshed sum-of-the-parts target price remains $49, implying 2% price appreciation expectation and 8% total return including the company’s 5.6% current yield.
