Enverus Intelligence Research (EIR), a subsidiary of Enverus, a trusted energy-dedicated SaaS company, has recently released a report that examines state-level renewable power adoption and population growth in order to estimate utility-specific long-term growth rates. The report also calculates the implied value of utilities and ranks them as either overvalued or undervalued relative to their current market price.
According to Kevin Kang, an associate at EIR, the substantial investment required for the energy transition will benefit regulated utilities. However, growth opportunities will not be evenly distributed. Utilities in regions characterized by higher renewable energy adoption and rapidly expanding customer bases will experience the most significant benefits.
Kang further highlights that there are several public utilities that are well-positioned for above-average growth due to their exposure to North Carolina, South Carolina, and Virginia. These regions are accelerating renewable development to meet targets and are also experiencing population growth.
The report provides key takeaways, including the fact that regulated utilities are poised to benefit from the investment in power generation and transmission needed to support the energy transition. However, growth opportunities will vary depending on the level of renewables penetration and customer base growth. Some utilities are undervalued, with expected growth rates surpassing the current valuations. If dividend growth expectations are adjusted to reflect long-term potential, share prices for these companies could appreciate by more than 60%.
On the other hand, some utilities are considered overvalued based on expected long-term growth. Investors have focused on short-term growth prospects without considering weaker growth over the long term. If dividend growth expectations revert to their long-term potential, share prices for these utilities could depreciate by almost 25%.
It’s important to note that access to the full report requires a subscription to Enverus Intelligence®.
EIR’s analysis draws on various Enverus products, including their Power & Renewable solutions within the Enverus PRISM® platform.
For media inquiries or to schedule an interview with one of Enverus’ expert analysts, please contact Jon Haubert.
Enverus Intelligence Research (EIR) is a subsidiary of Enverus that specializes in publishing energy-sector research focused on the oil, natural gas, power, and renewable industries. EIR produces reports on asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts. They also facilitate connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.
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