Mizuho maintains Evergy stock Outperform rating with $70 target

Mizuho Securities reiterated its Outperform rating on Evergy (EVRG) with a $70 price target, citing positive regulatory developments in Kansas following the KCC Staff's testimony in a rate case recommending a revenue requirement of approximately $114 million based on a 9.70% ROE. While Evergy's Q1 2025 adjusted EPS missed forecasts, revenue exceeded expectations, and the company is targeting 4-6% earnings growth through 2029 with a $17.5 billion capital investment plan; UBS also maintains a Buy rating with a $78 price target, viewing the Kansas rate case developments favorably.

Analysis

Mizuho Securities has reaffirmed its Outperform rating and a $70.00 price target for Evergy (NASDAQ:EVRG), citing positive developments in a rate case involving its subsidiary, Kansas Central. The Kansas Corporation Commission (KCC) Staff's testimony, which recommended a revenue requirement of approximately $114 million (representing about 58% of Kansas Central's initial request) based on a 9.70% return on equity (ROE) and a 48.74% equity ratio, is interpreted by Mizuho as a signal of an improving regulatory environment in Kansas. This development is seen as supportive of Evergy's target earnings per share (EPS) growth rate, which is anticipated to be in the upper half of the 4%-6% range, aligning with its midcap utility peers. Although Evergy's Q1 2025 adjusted EPS of $0.54 missed the forecasted $0.66, its revenue of $1.37 billion exceeded expectations. The company has outlined a $17.5 billion capital investment plan to drive long-term growth, targeting 4% to 6% earnings growth through 2029, with an emphasis on expanding renewable energy capacity and enhancing grid reliability. UBS also maintains a Buy rating on Evergy with a $78 price target, viewing the Kansas rate case developments, including the KCC Staff's recommendation on allocating parent company debt to the utility, as a positive advancement. Evergy currently trades at a P/E ratio of 17.83x, offers a 3.97% dividend yield supported by 34 consecutive years of payments and 21 years of dividend increases, and reported 6.29% revenue growth over the last twelve months, though it holds a FAIR financial health score from InvestingPro.

Key Decisions for Investors

• Investors should consider the constructive analyst viewpoints from Mizuho and UBS, alongside the favorable KCC Staff recommendations in the Kansas rate case, as potentially positive indicators for Evergy's stock performance.
• The anticipated settlement of the Kansas rate case by mid-July represents a significant near-term catalyst that warrants close monitoring for its impact on the company's financial outlook.
• Evaluate Evergy's recent Q1 EPS miss against its revenue beat, robust long-term capital expenditure plan, consistent dividend growth history, and the company's strategic focus on renewables and grid modernization.
• Closely scrutinize the final outcome of the Kansas rate case, particularly the approved ROE, equity ratio, and revenue requirement, as these will be critical determinants of Evergy's future profitability and regulated returns.