A Look At IDACORP (IDA) Valuation As Shares Trade Near Narrative Fair Value Estimates

Why IDACORP Is On Investors’ Radar Today

IDACORP (IDA) shares recently closed at $139.58, putting fresh attention on how this regulated utility’s returns over the past year stack up against its current valuation and earnings profile.

See our latest analysis for IDACORP.

Recent trading has been choppy, with a 2.6% 1 month share price return decline, but a 10.0% 3 month share price return and 25.3% 1 year total shareholder return suggesting momentum has been building over the longer stretch.

If this steady utility story has your attention, it can be useful to compare it with other infrastructure exposed names and check out 26 power grid technology and infrastructure stocks

With IDACORP trading at $139.58, sitting at a small discount to a US$147 analyst price target and carrying a high value score, you have to ask: is this a mispriced steady utility, or is the market already baking in future growth?

Most Popular Narrative: 5% Undervalued

With IDACORP last closing at $139.58 against a narrative fair value of $147.00, the most followed view sees limited undervaluation with modest upside assumptions built in.

Massive planned capital investments in transmission lines, energy storage, and generation assets, supported by a constructive regulatory environment and recent rate case filings, are described as expanding IDACORP's rate base, enhancing regulated returns and long-term earnings growth.

Read the complete narrative. Read the complete narrative.

Want to see what underpins that rate base story? Revenue, earnings, margins, even the future P/E multiple are all incorporated into this fair value estimate. The exact mix may surprise you.

Result: Fair Value of $147 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story can change quickly if severe weather reduces hydro output or if regulators limit the recovery of rising transmission and generation investment costs.

Find out about the key risks to this IDACORP narrative.

Another Angle on Value

While the narrative fair value of $147 points to mild undervaluation, the SWS DCF model tells a different story, with an estimated future cash flow value of $112.32 versus the current $139.58 share price. This frames IDACORP as overvalued on that basis and raises the question of which yardstick you trust more.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out IDACORP for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 61 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment in this article pulling in different directions, now is the time to look at the numbers yourself and decide what matters most to you, starting with 2 key rewards and 3 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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