Evergy Shares Navigate Divergent Analyst Views Amid Strategic Investments

Investors in utility company Evergy received a quarterly dividend payment yesterday, with the payout rising by 4% to $0.6950 per share. This positive cash return to shareholders arrives against a backdrop of mixed signals from Wall Street and a narrowed earnings outlook, raising questions about the company's near-term trajectory.

Market experts are divided on the stock's prospects. Mizuho Securities recently downgraded its rating on Evergy from "Outperform" to "Neutral," simultaneously reducing its price target to $76 from $86. This adjustment implies a lowered valuation expectation of approximately 11.6%. In contrast, UBS maintains a "Buy" recommendation and has increased its price target to $83. This stark divergence in opinion highlights the ongoing debate surrounding the utility's short-term growth potential.

Revised Forecast and Capital Plans

The company has tightened its adjusted earnings per share (EPS) guidance for 2025. The new range is $3.92 to $4.02, representing a reduction from the prior upper limit of $4.12. Management attributed the revision primarily to milder summer weather in Kansas and Missouri, which reduced cooling demand in the third and fourth quarters. Despite this near-term adjustment, Evergy reaffirmed its long-term target of 4% to 6% annualized adjusted EPS growth through 2029.

To support this growth, the firm has outlined significant capital requirements. It plans to raise approximately $2.8 billion in equity by 2029 to fund grid modernization and reliability enhancements.

Should investors sell immediately? Or is it worth buying Evergy?

Infrastructure Projects and Regulatory Landscape

Substantial infrastructure investments are underway. Regulators in Kansas have approved plans for two natural gas plants, representing an estimated $1.6 billion investment. This capital outlay is expected to lead to a regional rate increase of roughly 8.6% in the future. Evergy also anticipates new demand from major industrial projects, including a Panasonic battery plant and data centers operated by Google and Meta.

In Missouri, the Public Service Commission is reviewing applications for an additional $835 million in gas capacity, facing objections from the Sierra Club over cost-effectiveness. These pending regulatory decisions are likely to shape the investment plan for 2026.

Furthermore, the company is in preliminary discussions with Deep Fission regarding pilot projects for underground micro-nuclear reactors, though these talks remain in early stages.

Outlook and Key Dependencies

While large-scale projects and new demand programs offer a foundation for medium-term demand, Evergy's path forward remains subject to significant variables. Regulatory approvals, successful project execution, and weather patterns will be critical determining factors. The upcoming regulatory decisions and the implementation of the outlined capital program will be pivotal in shaping the company's financial position and 2026 forecasts.