Evergy (EVRG) Q4 Earnings Preview: AI Demand, Lawsuit Impact, and Dividend Outlook#
Evergy, Inc. (EVRG) is set to release its Q4 2024 earnings amid rising electricity demand and a transition to renewable energy. Investors are watching for updates on earnings, AI data center growth, a patent lawsuit, and dividend sustainability. The company's strategic investments and management's outlook will be key to its future performance.
Evergy's Q4 2024 Earnings: Key Takeaways#
Revenue and EPS Expectations for Q4#
As Evergy, Inc. (EVRG) prepares to release its fourth-quarter 2024 earnings on February 27, 2025, investors are keenly watching to see if the company can meet expectations amid a dynamic market landscape. The utility sector is currently navigating increasing electricity demand, driven by the proliferation of AI data centers, and a growing emphasis on renewable energy sources. Evergy's performance in this quarter will provide valuable insights into its ability to capitalize on these trends and manage potential challenges. According to Zacks.com, EVRG's fourth-quarter 2024 results are expected to continue to benefit from investments, energy efficiency programs, and customer growth.
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Analysts predict an EPS of $0.37 for Q4 2024, a significant +37% year-over-year increase, and revenue of $1.19 billion, a modest +0.5% increase. These figures reflect expectations of continued growth driven by strategic investments, energy efficiency programs, and customer growth. However, recent reports suggest a slight downward revision of the full-year 2024 EPS estimate by Zacks Research, adding a layer of uncertainty to the outlook. According to MarketBeat, Zacks Research lowered their FY2024 EPS estimate to $3.83, down from $3.84.
Beyond the numbers, investors will be focused on Evergy's commentary regarding its future strategy, particularly in light of increasing electricity demand and the ongoing transition to renewable energy. Any updates on the Birchtech Corp. patent infringement lawsuit will also be closely scrutinized. The earnings announcement is scheduled for February 27, 2025, before market open, as noted by BusinessWire.
AI Data Center Boom: Powering Evergy's Future Growth#
The electric utility sector is currently experiencing a surge in demand, largely fueled by the rapid expansion of AI data centers. These energy-intensive facilities require significant power to operate, placing strain on existing grid infrastructure and creating opportunities for utilities like Evergy to expand their capacity and revenue streams. Investors.com reports that Evergy is forecasting strong growth as electricity demand rises, fueled by a strained grid and the expansion of artificial intelligence data centers.
Evergy, with its strategic location in the Midwest, is well-positioned to benefit from this trend. The company is forecasting strong growth as electricity demand rises, driven by both a strained grid and the expansion of AI data centers in its service territory. This anticipated growth is a key factor driving investor interest in Evergy's stock. According to Monexa AI, the current stock price of EVRG is $69.15.
However, meeting this increased demand will require significant investments in infrastructure, including transmission lines and generation capacity. Evergy's plans to invest in two new 705 MW natural gas plants demonstrate its commitment to meeting this growing need, but also raise questions about its long-term sustainability goals. As stated in a press release by Evergy, Evergy will invest in two new 705 MW combined-cycle natural gas plants that will be built in Kansas, with operation beginning in 2029 and 2030.
Birchtech Lawsuit: A Cloud Over Evergy's Horizon?#
In early February 2025, Birchtech Corp. filed a patent infringement lawsuit against Evergy, alleging infringement of patent-protected mercury emissions technology. This lawsuit introduces a potential risk factor for Evergy, as it could result in significant legal costs and potential damages if Birchtech prevails. According to GlobeNewswire, Birchtech filed a patent infringement lawsuit against Evergy, seeking an injunction and damages related to mercury emissions technology.
The lawsuit seeks an injunction and damages, which could negatively impact Evergy's financial performance. The extent of the impact will depend on the scope of the patent, the extent of the alleged infringement, and the outcome of the litigation process.
While the long-term implications of the lawsuit are uncertain, it is likely to be a topic of discussion during Evergy's Q4 earnings call. Investors will be looking for reassurance from management regarding the company's defenses against the claims and its plans to mitigate any potential financial impact.
Evergy's Green Push: Investing in a Sustainable Future#
Evergy is committed to expanding its renewable energy portfolio, driven by both environmental regulations and increasing customer demand for clean energy. The company's strategic investment plans include adding more renewable assets to its generation mix, which is expected to boost its overall performance. According to Zacks.com, EVRG's strategic investment plans help it expand its operations in the transmission market. Adding more renewable assets should boost its performance.
Renewable energy investments offer several benefits for Evergy, including reducing its carbon footprint, complying with environmental regulations, and potentially attracting socially responsible investors. However, these investments also come with challenges, such as intermittency of renewable sources and the need for grid modernization to integrate these sources effectively.
The expected rate of return on Evergy's renewable energy investments will be a key factor in determining their long-term success. Investors will be looking for updates on the performance of existing renewable projects and the projected returns on new investments.
Dividend Investors: Is Evergy a Safe Bet?#
Evergy is recognized as a reliable dividend stock, making it an attractive investment for income-focused investors. The company has a consistent track record of paying dividends, and its current dividend yield of 3.75% is relatively attractive in the current market environment. According to Monexa AI, Evergy's dividend yield (TTM) is 3.75%.
However, the sustainability of Evergy's dividend payments is a key consideration for investors. The company's payout ratio, which measures the percentage of earnings paid out as dividends, is currently around 69%. This suggests that Evergy has a reasonable cushion to maintain its dividend payments, but it also leaves limited room for dividend increases in the near term. According to Monexa AI, Evergy's payout ratio (TTM) is 0.6923707957342083.
A comparison of Evergy's dividend yield and payout ratio to other utilities in the Midwest region will provide valuable context for assessing the attractiveness and sustainability of its dividend payments. Investors will also be closely watching Evergy's capital expenditure plans, as these investments could impact its ability to maintain its dividend in the future.
Energy Efficiency: Boosting Evergy's Bottom Line#
Energy efficiency programs are playing an increasingly important role in Evergy's strategy, contributing to both its Q4 earnings and its long-term financial performance. These programs aim to reduce electricity consumption by encouraging customers to adopt energy-saving measures, such as installing energy-efficient appliances and improving insulation.
The projected savings in operating costs and revenue from energy efficiency programs can be significant. By reducing electricity demand, Evergy can lower its fuel costs and defer the need for new generation capacity. These savings can then be passed on to customers in the form of lower electricity rates, further incentivizing energy efficiency.
Investors will be interested in learning more about the specific energy efficiency programs that are expected to contribute to Evergy's Q4 earnings, as well as the projected return on investment (ROI) for these programs. The company's ability to effectively implement and manage these programs will be a key factor in its long-term success.
Navigating the Regulatory Maze and Competitive Landscape#
Navigating the Regulatory Maze: Challenges and Opportunities#
Evergy operates in a complex regulatory environment, subject to oversight by both state and federal agencies. One of the key regulatory issues currently facing the company is the Kansas Central rate review, which will determine the rates that Evergy can charge its customers in Kansas.
The outcome of the rate review could have a significant impact on Evergy's future revenue streams. If the regulators approve a rate increase, it could boost the company's earnings. However, if they deny or reduce the requested increase, it could negatively impact its financial performance.
Investors will be closely watching the progress of the Kansas Central rate review and the potential impact on Evergy's earnings. The company's ability to effectively navigate the regulatory landscape will be a key factor in its long-term success.
Evergy vs. the Competition: A Midwest Utility Showdown#
Evergy faces competition from other utilities in the Midwest region, including Ameren, Xcel Energy, and Alliant Energy. These companies compete for customers, investments, and regulatory approvals.
Evergy's competitive advantages include its strategic location in the Midwest, its diversified generation mix, and its strong customer base. However, it also faces challenges, such as the need to invest in infrastructure to meet increasing electricity demand and the potential financial impact of the Birchtech Corp. lawsuit.
A comparison of Evergy's financial performance, growth prospects, and dividend yield to those of its competitors will provide valuable insights into its relative attractiveness as an investment. Investors should also consider the regulatory and political environments in the states where Evergy and its competitors operate.
Looking Ahead: Strategy and Prospects#
Management's Vision for Evergy's Future#
Looking ahead to 2025 and beyond, Evergy's management team is focused on executing its strategic plan, which includes investing in infrastructure, expanding its renewable energy portfolio, and optimizing its energy efficiency programs.
The company is also committed to maintaining a strong balance sheet and returning value to shareholders through dividends and share repurchases. Evergy's initial 2025 adjusted EPS forecast between $3.92 and $4.12 demonstrates its confidence in its ability to deliver continued growth. According to Barchart.com, Initial 2025 adjusted EPS forecast between $3.92 and $4.12
Investors will be looking for further details on Evergy's strategy during the Q4 earnings call, as well as insights into the company's long-term vision for the future. The management team's ability to effectively communicate its strategy and execute its plans will be crucial for maintaining investor confidence and driving long-term shareholder value.
Key Financial Metrics#
| Metric | Value | Source |
|---|---|---|
| Current Stock Price | $69.15 | Monexa AI |
| Dividend Yield (TTM) | 3.75% | Monexa AI |
| Payout Ratio (TTM) | 69.24% | Monexa AI |
| Q4 2024 Expected EPS | $0.37 | Zacks.com |
| Q4 2024 Expected Revenue | $1.19B | Zacks.com |
| FY2024 EPS Estimate | $3.83 | MarketBeat |
Analyst Estimates#
| Year | Estimated Revenue Avg (USD) | Estimated EPS Avg | Number of Analysts Estimated Revenue | Number of Analysts Estimated EPS |
|---|---|---|---|---|
| 2025 | 5,942,979,205 | 4.02389 | 7 | 8 |
| 2026 | 6,161,354,979 | 4.26016 | 9 | 6 |
| 2027 | 6,407,060,000 | 4.50223 | 6 | 4 |
| 2028 | 6,616,333,333 | 4.77203 | 2 | 3 |
Strategic Implications#
- AI Data Center Growth: Evergy is well-positioned to capitalize on the increasing demand for electricity from AI data centers. However, significant infrastructure investments will be required to meet this demand.
- Renewable Energy Transition: Evergy's commitment to expanding its renewable energy portfolio aligns with environmental regulations and customer demand for clean energy. The rate of return on these investments will be a key factor in their long-term success.
- Regulatory Landscape: The Kansas Central rate review and other regulatory issues could have a significant impact on Evergy's future revenue streams. Effective navigation of the regulatory landscape will be crucial for the company's long-term success.
- Dividend Sustainability: Evergy's dividend payments are attractive to income-focused investors. However, the sustainability of these payments will depend on the company's ability to maintain a strong balance sheet and generate sufficient cash flow.
- Birchtech Lawsuit: The outcome of the Birchtech Corp. patent infringement lawsuit could have a negative impact on Evergy's financial performance. Investors will be looking for reassurance from management regarding the company's defenses against the claims.