Jefferies raises Alliant Energy stock price target on growth outlook

Jefferies raised Alliant Energy’s price target to $85 from $84 and kept a Buy rating, implying about 18% upside from the current $72.31 share price. The firm pointed to EPS growth acceleration above 8% through 2030, a 2.96% dividend yield, and a 56-year dividend streak, while noting recent project additions including a 370-MW project and a 1.1-GW combustion turbine. The latest quarter was slightly mixed, with ongoing EPS of $0.82 versus $0.83 expected and revenue of $1.18 billion in line with estimates.

Analysis

LNT is being rerated less on near-term earnings quality and more on the duration of its load-growth runway. The market is still discounting the typical utility ceiling, but data-center-linked capex changes the math: regulated asset growth can compound faster when incremental spend is tied to scarce, high-visibility power capacity rather than slow organic load. That makes the equity story less about the current dividend yield and more about the embedded option value of future rate base expansion if management converts announced projects into authorized returns without large lag.

The key second-order effect is competitive: utilities with permitted land, transmission access, and a reputation for regulatory execution become quasi-infrastructure platforms for hyperscalers. That should widen the gap versus peers in less attractive jurisdictions, but it also raises execution risk because capital intensity can outrun allowed ROE if regulators push back on cost recovery or if project timing slips. In that scenario, the market may punish LNT for an earnings miss even if the long-duration thesis remains intact, because utility multiples are highly sensitive to perceived balance-sheet strain and rate-case friction.

The contrarian point is that the move may be under-discounting the duration of the catalyst. This is not a one-quarter story; the inflection is over 12-36 months as capex refreshes translate into rate-base growth and visible EPS acceleration. The valuation still looks more like a bond proxy than a scarce-power compounder, so if management keeps adding project disclosures, the stock can re-rate even without outsized earnings beats. The main reversal trigger is a broader rates backup or any evidence that incremental load is being promised faster than it can be monetized under utility regulation.

Key Decisions for Investors

• Go long LNT on pullbacks over the next 1-3 months; target 8-12% upside if the market starts capitalizing the data-center load pipeline, but cut if 10Y yields reprice materially higher or if project permitting/regulatory commentary turns cautious.
• Buy LNT Jan-2027 call spreads to express the 12-24 month rate-base growth thesis; this offers better asymmetry than common stock if management confirms project conversion in upcoming capital-plan updates.
• Pair trade: long LNT / short a lower-growth regulated utility with weaker data-center exposure and slower capex growth over 6-12 months; the spread should work if investors keep paying up for visible load-driven rate-base expansion.
• If already long, monetize some upside into any near-term rerating toward the low-mid 20s P/E as utility investors often cap multiple expansion before realized EPS inflects; hold the rest for the 2026 capital-plan refresh catalyst.