Scotiabank Starts TXNM Energy (TXNM) at Sector Perform

Scotiabank analyst Andrew Weisel initiates coverage on TXNM Energy (NYSE: TXNM) with a Sector Perform rating and a price target of $46.00.

The analyst comments "We have initiated coverage on the common shares of TXNM Energy (TXNM) with a Sector Perform rating and a $46 price target. While we’re encouraged by the potential for a New Mexico regulatory turnaround story and agree that upside to capex may be meaningful, particularly in Texas, we see both regulatory environments as riskier than average. Coupled with below-average near-term EPS growth, peer-average long-term EPS and dividend growth, and a balance sheet that isn’t top of its class (but with a path to improvement), we see the valuation as reasonable: a ~10% P/E discount to the median of our coverage, but in line with small cap peers. While we recognize the appeal of a pure-play, two-state, all-electric regulated utility holding company, we see a balancing act between positive near-term catalysts and regulatory and headline risks in both states. Given our risk-averse nature and the lumpy trajectory of historical and future earnings growth, we see better alternatives elsewhere that provide more consistent and defensive risk-adjusted growth. Our $46 target price is based on a 5% discount to our sector anchor multiple of 16x, applied to our 2026 EPS forecast of $3.02, and implies a 10% total return (including the dividend yield)."

For an analyst ratings summary and ratings history on TXNM Energy click here. For more ratings news on TXNM Energy click here.

Shares of TXNM Energy closed at $43.06 yesterday.

You May Also Be Interested In

• Alcoa (AA) PT Lowered to $58 at Freedom Broker
• Roth/MKM Starts Ambiq Micro Inc (AMBQ) at Buy
• US Backs Iraq-syria Oil Pipeline To Weaken Iran's Hormuz Hold - Bloomberg