Is Xcel Energy Stock Underperforming the S&P 500?

Xcel Energy Inc. (XEL), headquartered in Minneapolis, Minnesota, generates, purchases, transmits, distributes, and sells electricity. With a market cap of $45.7 billion, the company also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and XEL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the utilities - regulated electric industry. XEL stands out for its substantial renewable energy portfolio, with over half its electricity sales derived from carbon-free sources, aligning with global sustainability trends and appealing to eco-conscious consumers. A significant strength lies in its ability to recover capital-intensive infrastructure investments through regulatory mechanisms, thereby ensuring financial stability and supporting steady revenue growth.

Despite its notable strength, XEL slipped 7% from its 52-week high of $83.01, achieved on Oct. 16. Over the past three months, XEL stock has gained 6.2%, outperforming the S&P 500 Index’s ($SPX) 6% gains during the same time frame.

In the longer term, shares of XEL rose 12.6% on a six-month basis and climbed 8.9% over the past 52 weeks, underperforming SPX’s six-month gains of 15.7% and 13.1% returns over the last year.

To confirm the bullish trend, XEL has been trading above its 200-day moving average over the past year, with slight fluctuations. However, the stock has been trading below its 50-day moving average recently.

On Oct. 30, XEL shares closed up more than 2% after reporting its Q3 results. Its adjusted EPS of $1.24 fell short of Wall Street expectations of $1.31. The company’s revenue was $3.92 billion, falling short of Wall Street's $3.93 billion forecast. XEL expects full-year adjusted EPS in the range of $3.75 to $3.85.

In the competitive arena of utilities - regulated electric, American Electric Power Company, Inc. (AEP) has taken the lead over XEL, showing resilience with a 15.8% uptick on a six-month basis and solid 23% gains over the past 52 weeks.

Wall Street analysts are bullish on XEL’s prospects. The stock has a consensus “Strong Buy” rating from the 18 analysts covering it, and the mean price target of $89.75 suggests a potential upside of 16.3% from current price levels.

On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.