Jefferies LLC on May 26 initiated coverage of Alliant Energy Corp. with a rating of "hold" and a 12-month price target of $42 per share.
Jefferies noted that while challenges exist in the company's load growth outlook, regulators in Iowa and Wisconsin seem broadly supportive of Alliant's CapEx plans.
"We think [Alliant] is fairly valued trading at a premium to the utility group — [Alliant]'s two utilities operate in balanced jurisdictions — Iowa and Wisconsin — that are generally supportive of the utilities' capex plans, which is driven by a years long process of retiring older coal-fired units and replacing with new gas-fired [combined-cycle gas turbines] and wind," Jefferies analyst Anthony Crowdell wrote.
With a largely rural service territory, Jefferies said load growth is mostly dependent on usage growth by agri-business customers rather than customer growth.
Jefferies' EPS estimates for Alliant for 2017 through 2020 are $2.00, $2.12, $2.22 and $2.36, respectively.