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CMS Energy to Gain From Infrastructure Investment Projects

Zacks Equity Research
Updated
Covia Holdings (CVIA) is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat.

We issued an updated research report on CMS Energy Corporation CMS, operates as an energy company in Michigan. The company operates through three segments — Electric Utility, Gas Utility, and Enterprises — and provides services to nearly 1.8 million electric customers and 1.8 million gas customers in Michigan. 

What’s Driving the Stock?

The company is currently focused on capacity maximization, reliability improvement, clean power generation and infrastructure upgrade. Moreover, CMS Energy boasts a solid capital expenditure program, under which it plans to spend $10.1 billion on infrastructure upgrades as well as replacements and electric supply projects from 2018 through 2022.

The company expects tospend $4.9 billion for Gas Infrastructure, $3.5 billion for Electric Distribution and $1.7 billion for Electric Supply. These initiatives will enable the company to provide reliable services to customers and achieve long-term EPS growth target in the range of 6-8%. Moreover, capital investments have enabled the company to reduce operation and maintenance costs by 3% in the 2014-2016 period. CMS Energy expects to reduce these costs by another 2% between 2017 and 2019.

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CMS Energy is undertaking initiatives to expand renewable portfolio. To this end, during the third quarter, CMS Energy entered into an agreement to purchase a 105-MW wind generation project in Ohio, which will be supplied to General Motors, under a 15-year PPA. The project has initiated operations in September 2018.

In the last four quarters, CMS Energy reported an average positive earnings surprise of 6.37% and deliveredthird-quarter 2018 adjusted earnings per share of 59 cents. The figure surpassed the Zacks Consensus Estimate of 57 cents by 3.5%. 

Other utility companies that surpassed the Zacks Consensus Estimate in third quarter are  NextEra Energy NEE, DTE Energy Company DTE and FirstEnergy Corporation FE outpaced the third-quarter 2018 adjusted earnings by 0.46%, 22.4% and 9.59%, respectively.

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DTE Energy Company (DTE) : Free Stock Analysis Report
 
FirstEnergy Corporation (FE) : Free Stock Analysis Report
 
CMS Energy Corporation (CMS) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
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Zacks Investment Research