Ameren (AEE) Scales A New 52-Week High On Strong Q2 Results

Ameren Corporation (NYSE:AEE) scaled a new 52-week high of $60.58 during the trading session on Aug 25, before closing a tad lower at $60.37. The stock has delivered a one-year return of about 21.3% compared with the industry’s gain of 6.9%.

In the past 52 weeks, Ameren Corporation’s share price has ranged from a low of $46.84 to a high of $60.58. Average volume of shares traded in the last three months is approximately 1.3 million.

Why an Upward Trend?

Ameren Corporation’s shares have been on the rise following strong second-quarter 2017 results released on Aug 4. The company reported earnings from continuing operations of 79 cents per share, beating the Zacks Consensus Estimate of 69 cents by 14.5%. The bottom line also improved 29.5% year over year.

The company has been a consistent performer, delivering positive earnings surprises in three of the trailing four quarters with an average surprise of 2.83%. The long-term earnings growth of the company is presently pegged at 6.50%.

Ameren Corporation follows a systematic investment strategy, primarily for growth projects and infrastructure upgrade. This strategy has enabled the company in providing reliable services to customers as well as meeting increasing demand.

The company has increased its expected capital expenditure plan for the 2017-2021 time frame from $10.8 billion. It currently expects to spend $11.2 billion, comprising up to $4.2 billion, $6.4 billion and $0.6 billion for Ameren Missouri, Ameren Illinois and ATXI, respectively. These additional investments are expected improve the experience of its customers and in turn increase their trust on Ameren. These investments will support its overall system reliability, environmental compliance and electric and natural gas utility infrastructure improvements.

Following its exit from the merchant generation business - Ameren Energy Resources Company – Ameren is currently concentrating on its rate-regulated utilities. The company expects 6% compound annual rate base growth from 2016 through 2021. Focus on its regulated utilities will help to meet projected compound annualized earnings growth of 5-8% in the 2016-2020 time frame.

Moreover, the unemployment rate in parts of Ameren’s service territories is better than the national average. An improving economy is likely to boost future utility demand in the state, thereby improving the company’s performance.

Zacks Rank and Stocks to Consider

Ameren Corporation has a Zacks Rank #2 (Buy). Few other well-ranked stocks in the same space are NiSource, Inc (NYSE:NI) , CenterPoint Energy, Inc. (NYSE:CNP) and Pattern Energy Group Inc. (NASDAQ:PEGI) , all carrying Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NiSource reported second-quarter 2017 earnings from continuing operations of 10 cents per share, in line with the Zacks Consensus Estimate. The company’s 2017 estimates increased 0.84% to $1.19 per share in the last 90 days.

CenterPoint Energy reported second-quarter 2017 earnings from operations of 29 cents per share, beating the Zacks Consensus Estimate of 21 cents by 38.10%. The company’s 2017 estimates increased 1.55% to $1.31 per share in the last 90 days.

Pattern Energy Group reported second-quarter 2017 operating earnings from continuing operations of 16 cents per share, beating the Zacks Consensus Estimate of 13 cents by 23.08%. The company’s 2017 estimates increased 28.6% to 27 cents per share in the last 30 days.

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