Ameren exceeded analyst expectations

Ticker: AEE

Author: Stock Analyst  Date: 2021/02/26

Ameren, a St. Louis-based power grid holding company, reported for Q4 2020, beating analysts' expectations, with the company's Oct-Dec EPS adjusted to $0.46 versus $0.42 consensus. Annual refined EPS amounted to $3.50 (4.5% y / y growth), being slightly above the middle of the management's forecast range of $ 3.40-3.55. At the same time, the expected value of the same indicator for 2021 is between $3.65 and $3.85.

A positive factor for Ameren's future profit may be a likely increase in the Fed's key rate, to which ROE standards are tied in a number of divisions, as well as investments in infrastructure upgrades and the development of green generation. The main driver of growth in the quality of Ameren's financial results in the past few years has been cost management: from 2015 to 2020, the company achieved a 4% decrease in operating expenses, while net profit increased by 31%.

Our current recommendation for Ameren is Hold with a target of $ 74.29 at end-December 2021, which translates into 4.05% potential ex-dividend. NTM's dividend yield is expected to be 2.94%.