How Much Could Duke’s Valuation Change If Its Unit Pricing Changes?

-2.70%
Downside
96.71
Market
94.10
Trefis
DUK: Duke Energy logo
DUK
Duke Energy

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.

duke unit pricing

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:

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Duke Energy
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