How The Texas Rate Case Is Weighing On CenterPoint Energy Stock
CenterPoint Energy (NYSE:CNP), an electric and natural gas utility company that operates in markets including Arkansas, Louisiana, Minnesota, and Texas, has seen its stock price decline by roughly 16% over the last month. The decline is largely due to lowered expectations from the company’s rate case in Houston, Texas – its single largest market – which accounts for over 25% of revenues. This could put pressure on the company’s earnings going forward. The negative regulatory developments have caused multiple brokerage firms to downgrade the stock.
We ‘step back’ from these recent swings to review CenterPoint performance over the last few years, as a context for what might come next. Our Interactive dashboard, Why Has CenterPoint Stock Been Trending Lower? reviews the near term reasons and the big picture.
The context for the last few years:
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A closer look At CenterPoint’s Total Revenues over the last few years and the outlook
Total Revenues for CenterPoint Energy increased from $9.61 Bil in 2017 to $10.6 Bil in 2018; an increase of 10.1%.
This compares with Total Revenues growth of:
- 1.92% in 2016 compared to 2015
- 27.7% in 2017 compared to 2016, driven by the acquisition of Continuum Energy’s retail energy services business
We expect Total Revenues growth to be 23% in 2019, on account of the company’s $6 billion acquisition of Vectren, another utility company.
A closer look At CenterPoint’s Total Expenses over the last few years and the outlook
Total Expense for CenterPoint Energy significantly increased from $8.55 Bil in 2017 to $10.1 Bil in 2018; an increase of 17.8%.
This compares with Total Expense growth of:
- -19.7% in 2016 compared to 2015
- 25.0% in 2017 compared to 2016
We expect Total Expense growth to be 20.5% in 2019.
How does CenterPoint’s Revenue Growth compare with rivals?
For more details on how CenterPoint’s Revenue Growth compares to its rivals, view our interactive dashboard analysis.
How has CenterPoint’s EBT trended?
EBT for CenterPoint Energy decreased substantially by -51.6% from $1.06 Bil in 2017 to $514 Mil in 2018. We expect EBT to rise by 68% to $0.9 Bil in 2019.
How has CenterPoint’s Net Income and EPS trended?
For more details on CenterPoint’s Net Income and EPS, view our interactive dashboard analysis.
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