Evergy Rides on Strategic Investments & Renewable Expansion

Evergy, Inc.’s EVRG planned investments and strategic acquisitions should further help expand its operations in the transmission market. The company intends to add more renewable assets to boost its overall performance.

However, this Zacks Rank #3 (Hold) company faces risks related to delays in completing ongoing capital projects and weather fluctuations.

Tailwinds Favoring EVRG

Evergy’s long-term investment plans are focused on transmission, distribution infrastructure upgrades and customer-facing platforms to improve reliability. In 2024, the company invested $2.34 billion in infrastructure to modernize the grid, replace aging equipment and advance its sustainability. The company targets nearly $17.5 billion in capital investments for 2025-2029, including a new generation of approximately $6.17 billion, which is expected to be renewable.

EVRG is actively building renewable projects with a capacity of 800 MW. Out of this, 500 MW is included in its 2-3% demand forecast. In October 2024, Evergy announced its plan to construct two combined-cycle natural gas plants located in Kansas. Evergy Kansas Central and Evergy Missouri West will jointly own the first site, which is expected to have an initial generating capacity of nearly 705 MW. The plant is expected to begin operations by the summer of 2029. The second site, which is scheduled to begin operations by the summer of 2030, also has a capacity of almost 705 MW.

Evergy’s joint venture with American Electric Power is named Transource Energy. Transource Energy is focused on developing competitive electric transmission projects across the United States. These projects hold significant potential for long-term growth. Evergy, with a 13.5% interest in the venture, is well-positioned for sustainable and long-term growth in the transmission market.

Headwinds for EVRG

The company’s capital projects could be delayed due to permit delays, inadequate availability, or increased costs of equipment and materials, which are beyond its control. This could increase the cost of the projects, adversely impacting EVRG’s profitability.

Electricity sales are seasonal and changing weather conditions play a pivotal role in the overall performance of the company. Mild winter and summer seasons can reduce the demand for electricity, thereby affecting EVRG’s performance.

EVRG’s Stock Price Performance

In the past three months, shares of the company have risen 14.8% compared with the industry’s 7.4% growth.

Stocks to Consider

Some better-ranked stocks from the same industry are Exelon Corporation EXC, WEC Energy WEC and OGE Energy OGE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EXC’s long-term (three to five years) earnings growth rate is 5.71%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) is pinned at $2.66, indicating a year-over-year increase of 6.4%.

WEC Energy’s long-term earnings growth rate is 6.79%. The Zacks Consensus Estimate for 2025 EPS is pinned at $5.24, implying year-over-year growth of 8.5%.

OGE’s long-term earnings growth rate is 6.05%. The Zacks Consensus Estimate for 2025 EPS is pinned at $2.27, suggesting a year-over-year improvement of 3.7%.

 

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This article originally published on Zacks Investment Research (zacks.com).

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