How Much Could Duke’s Valuation Change If Its Unit Pricing Changes?
Duke Energy (NYSE: DUK) has found it difficult to grow its revenue per unit of electricity sold for its U.S. Franchised Electric and Gas Division in recent years. This division contributes more than 90% of our valuation for the company. Consequently, most of its revenue growth has come from growing the number of customers using its services. However, the company has been working on making its grids smarter and diversifying the sources from which it generates its electricity. As a result, it is possible that the company can start growing its revenue per MWh going forward. The table below shows three scenarios and compares the impact on our valuation for the company.
If Duke’s unit pricing declines by 1% per year over our review period, our valuation for the company could decline by 12.4%. However, if the unit price increases by 1% each year over the same period, our valuation for the company could increase by 15.7%.
Have more questions about Duke? See the links below:
- How Much Did Duke Energy’s Revenue & EBITDA Grow In The Last Five Years?
- How Much Can Duke Energy’s Revenue Grow In The Next Five Years?
- What Is Duke Energy’s Fundamental Value Based On Expected 2016 Results?
- How Has Duke Energy’s Revenue Composition Changed In The Last Five Years?
- Duke Energy Jumps 10% On Takeover Rebuff News – What’s Going To Happen Now?
- Duke Energy Could Have 20% Upside. What Are The Catalysts?
- Duke, Southern, Dominion: Utility Stocks Continue To Underperform. Time To Buy?
- Is Ameren’s 2x Price Rise Compared To Duke Energy Justified?
- Why NextEra’s 5x Price Rise Versus Duke Energy Is Not Justified
- Duke, NextEra, Southern: Are Big Utilities Riskier Through This Downturn?
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