Mizuho Raises Price Target on Xcel Energy (XEL) to $94

💡 Mizuho upgrades Xcel Energy to $94, citing strong cash flow generation and a stable dividend profile.

The Federal Reserve delivered a hawkish surprise on Wednesday, signaling that interest rate cuts remain further away than markets had hoped. Mizuho analyst Gregory W. Lewis told investors that Xcel Energy's cash flow generation and stable dividend profile make it an attractive play in a sector with rising interest rates.

Strong Cash Flow Generation Xcel Energy's **cash flow margin** is expected to increase to **23%** in 2024, driven by a **20%** increase in **regulatory revenue**. The company's **debt-to-equity ratio** stands at a **low 0.7x**, indicating a strong financial position to withstand rising interest rates.

Stable Dividend Profile Xcel Energy has a history of **consistently paying dividends**, with a **yield of 3.3%**. The company's **payout ratio** is expected to remain below **70%** in 2024, indicating a **stable dividend profile**.

Outlook Mizuho's $94 price target implies a **13% upside** from current levels. The firm's **buy rating** on Xcel Energy is driven by the company's strong cash flow generation, stable dividend profile, and attractive valuation.

What It Means for Investors Do you think Xcel Energy will continue to outperform in a rising interest rate environment? Share your view in the comments.