This utility stock could get a boost from data center deals, JPMorgan says
Ameren is likely to see its shares climb as it positions itself as an energy supplier for the data center boom, according to JPMorgan. The investment bank upgraded the public utility company to overweight from neutral. It also hiked its price target on shares to $126 from $120, implying 16% upside from Wednesday’s close. “With data center datapoints piling up, we have higher confidence in the company’s growth outlook and see the potential for the EPS [compound annual growth rate] to inflect higher,” analyst Jeremy Tonet said in a note to clients. AEE YTD mountain AEE year to date Ameren has struck agreements to provide electricity for data centers in Illinois and Missouri, which Tonet thinks will power growth. The company’s deals in Missouri are particularly promising due to the state’s data center friendly regulations, per Tonet. “We have grown to appreciate [Missouri’s] very constructive regulatory environment, where large load tariffs, rate design…aid affordability and all stakeholders,” Tonet wrote. “While [Illinois] rebased in recent years and remains steady, [Missouri] provides a relatively robust political backdrop (no gubernatorial election), absent the headline risk and election noise pervading many states.” The Street is split on Ameren. Of the 18 analysts covering Ameren, 9 have a buy or strong buy rating on the stock, while 9 have a hold on it, LSEG data shows. Shares have risen 9% in the year to date.
