PPL Corporation PPL is expected to report an improvement in its top line and a decline in bottom line when it reports 2024 results on Feb. 13, before market open.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for PPL’s fourth-quarter revenues is pegged at $2.09 billion, indicating growth of 3.1% from the year-ago reported figure.

The Zacks Consensus Estimate for earnings is pegged at 37 cents per share. The Zacks Consensus Estimate for PPL’s fourth-quarter earnings indicates a decline of 7.5% from the year-ago reported figure.

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Earnings Surprise History

PPL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 9.85%.

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What the Zacks Model Unveils

Our model does not conclusively predict a likely earnings beat for PPL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: PPL has an Earnings ESP of -0.67%.

Zacks Rank: PPL currently carries a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Some stocks in the same industry that have the combination of factors indicating an earnings beat this season are CenterPoint Energy CNP, OGE Energy OGE and PG&E Corporation PCG. CNP, OGE and PCG carry Earnings ESP of +0.63%, +2.41% and +1.64%, respectively, and currently carry a Zacks Rank of 2 each.

Factors Likely to Have Shaped PPL’s Q4 Earnings

PPL is experiencing load growth, driven by data center demand in its Pennsylvania and Kentucky service territories. PPL can benefit from the rising demand for data centers, as the new AI-driven data centers require more electricity than conventional data centers. Expected higher sales volume in Pennsylvania and Kentucky region is likely to have boosted fourth-quarter earnings.

PPL’s fourth-quarter earnings likely to have gained from the ongoing cost initiatives of the company. It is reducing Operation & Maintenance expenses by an average of 2.5% per year.

PPL’s Price Performance and Valuation

PPL’s shares have gained 30.2% in the past year compared with its industry’s rally of 20.8%.

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PPL is currently valued at a premium compared to its industry on a forward 12-month P/E basis.

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Investment Thesis

PPL operates in a constructive regulatory jurisdiction. Over 60% of PPL’s capital investment plan is subject to “contemporaneous recovery,” and it reduces the impact of regulatory lag on earnings for investments. The recovery of capital expenditures quickly allows the company to fund long-term projects easily.

PPL is involved in more than 175 research and development projects. It is also in partnership with more than 30 industry and academic partners. These projects are expected to help accelerate low-carbon energy technologies to strengthen network resiliency and build the future grid.

Credit rating agencies also improved the company’s credit ratings to positive this year. As of Sept. 30, 2024, PPL had an unused credit capacity of nearly $3 billion, which further enhanced its liquidity. Its times-interest-earned ratio was 2.4 at the end of the third quarter of 2024. The strong ratio indicates that the company will be able to meet interest obligations in the near future without any difficulties.

Wrapping Up

PPL is set to benefit from rising demand for energy in its service territories, cost savings initiatives and real-time recovery mechanisms of over 60% of capital expenditure without the need for base rate cases.

Given PPL’s strong liquidity and load growth in its service territories, investors can think about adding this stock to their portfolio.

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PPL Corporation (PPL) : Free Stock Analysis Report

Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report

OGE Energy Corporation (OGE) : Free Stock Analysis Report

CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report

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