On Thursday, Mizuho (NYSE:MFG) reiterated its Outperform rating and $120.00 price target for IDACORP, Inc. (NYSE:IDA), anticipating an informative fourth-quarter update for the year 2024. According to InvestingPro data, analyst targets for IDACORP range from $100 to $129, with the stock currently trading at $107.45. The company has demonstrated remarkable stability, maintaining dividend payments for 54 consecutive years.
The firm expects IDACORP to release its 2025 earnings per share (EPS) guidance during the upcoming call, scheduled for February 13, 2025, along with updates on its rate base and capital expenditure/financing guidance extending to 2029. InvestingPro analysis indicates the stock is trading at a relatively high P/E ratio of 19.7x relative to its near-term earnings growth, suggesting investors should closely monitor the upcoming guidance.
Mizuho's outlook is based on the conclusion of IDACORP's Idaho rate case, which was finalized late in the previous year. The analysts at Mizuho suggest that the company may revise its rate base guidance methodology to reflect a 13-month average monthly average (AMA) in the final year of their range, as opposed to the period end. This change could potentially lead to a lower compound annual growth rate (CAGR) than the previously reported 16.9%.
The analysts noted that if IDACORP had used an average for the years 2027-2028 instead of the period end for 2028 in their last update, the CAGR from the 2023 average would have been 16.2% rather than 16.9%. This observation underscores the significance of the methodology used in calculating the rate base guidance.
Mizuho's reiteration of the $120 price target comes as they maintain their estimates for the company. The upcoming corporate call is expected to provide investors with a clearer picture of IDACORP's financial trajectory and strategic plans for the near future. The analysts' comments reflect a keen interest in the company's approach to updating its financial guidance and the potential impacts of these updates on its growth rate.
In other recent news, IDACORP Inc (NYSE:IDA).'s subsidiary, Idaho Power Company, has received approval for a 3.7% increase in its annual Idaho-jurisdictional retail revenue, equating to an additional $50.6 million. This adjustment, approved by the Idaho Public Utilities Commission (IPUC), is set to take effect from 2025. The rate increase stems from a limited scope rate case filed by Idaho Power, addressing revenue requirements related to incremental plant additions and ongoing labor costs.
Simultaneously, IDACORP reported an increase in third-quarter 2024 earnings per share (EPS) to $2.12, up from $2.07 in 2023. The company has revised its 2024 EPS guidance upwards, now expecting it to fall between $5.35 and $5.45, attributed to a robust customer growth rate of 2.6% and strategic capital investments.
In the analyst arena, Jefferies increased IDACORP's price target while maintaining a Hold rating. In contrast, BofA Securities upgraded the stock's rating from Neutral to Buy. Both firms recognized IDACORP's strong fundamentals, including significant rate base growth and solid load growth.
Regarding future plans, IDACORP aims to increase its capital expenditures by 46% to $1.8 billion over the next five years, with the objective of doubling its net rate base during this period.
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