Xcel Energy rated new Equal Weight at Barclays with Colorado case pending
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Xcel Energy (NASDAQ:XEL) -0.8% in Thursday's trading as Barclays initiated coverage with an Equal Weight rating and $60 price target, citing headwinds including wildfire litigation.
Xcel (XEL) is starting to look more attractive as it now trades at just a ~3% price-to-earnings premium vs. the large-cap electric group, but Barclays said it is "looking for greater comfort in how XEL will navigate Colorado from both a gas rate case standpoint and wildfire liability mitigation before getting more constructive."
While Xcel (XEL) operates in somewhat challenging jurisdictions, Barclays "sees the multi-state geography, credit profile (18%-20% FFO/debt), high quality management team, and track record for hitting stated growth targets arguing for a continued premium approach."
Barclays also said the market has largely priced in constructive outcomes for five pending rate cases in Colorado, New Mexico, Texas and Wisconsin, with Colorado notably seeing a verbal order on the electric rate case settlement in mid-August.
Xcel (XEL) joins the 26 names in Barclays' coverage launch this week of the utility sector.

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