Truist Maintains Buy Rating on Xcel Energy After Q1 Earnings
11h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
xcel-energyxel
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Truist Securities maintained its Buy rating on shares of Xcel Energy Inc. (XEL) on 13 June 2026. The financial institution issued the updated stance following the utility’s first-quarter 2026 earnings report. Xcel Energy reported adjusted earnings per share of $0.86, exceeding the consensus estimate by 7.5%. The company reaffirmed its full-year 2026 adjusted EPS guidance range of $3.45 to $3.55.
The rating affirmation arrives during a period of heightened scrutiny for electric utilities. The sector faces pressure from elevated interest rates and high capital expenditure requirements for the energy transition. The 10-year US Treasury yield traded at 4.28% on the date of the announcement, up 40 basis points year-to-date. This macro backdrop increases borrowing costs for capital-intensive infrastructure projects.
Truist’s decision is directly tied to Xcel Energy’s recent regulatory progress. In May 2026, the Colorado Public Utilities Commission approved a partial settlement in Xcel’s electric rate case. That decision provides greater visibility into future revenue. The last major sector-wide catalyst was the Federal Energy Regulatory Commission’s Order 1920 in May 2024, which mandated transmission planning reforms.
The immediate catalyst for Truist’s review is the company’s demonstrated cost management. Despite inflationary pressures, Xcel reported O&M expenses 2.1% below management’s forecast for the quarter. This operational discipline supports earnings stability in a challenging rate environment.
Xcel Energy’s stock closed at $59.42 on 12 June, the trading day before the rating update. The share price represents a year-to-date decline of 3.2%. This performance lags the S&P 500 Utilities Select Sector Index, which is down 1.8% over the same period. Xcel’s current dividend yield is 3.41%, based on an annual payout of $2.03 per share.
| Metric | Xcel Energy (XEL) | Peer Median (Large-Cap Electric) |
|---|---|---|
| 2026 P/E (Est.) | 17.2x | 18.5x |
| Dividend Yield | 3.41% | 3.65% |
| 5-Yr EPS Growth (Est.) | 5.8% | 5.2% |
The company’s market capitalization stands at approximately $32.8 billion. Xcel’s reported Q1 revenue was $4.12 billion, a 4.5% increase year-over-year. The utility serves electricity to over 3.7 million customers and natural gas to more than 2.1 million customers across eight states.
Truist’s continued support signals confidence in Xcel’s regulatory compact. Positive outcomes in ongoing rate cases in Minnesota and Wisconsin could unlock an additional $300 million to $400 million in annual revenue. This would directly benefit earnings power and support the current dividend growth trajectory of 5-7% annually.
Utility investors focused on income may reallocate toward names with stronger regulatory visibility. This could benefit peers like NextEra Energy (NEE) and WEC Energy Group (WEC), which have established track records of constructive regulatory outcomes. Conversely, utilities with pending, contentious rate reviews, such as FirstEnergy (FE), may see relative underperformance until clarity emerges.
A primary risk to the thesis is regulatory lag. If final decisions in key jurisdictions are delayed or produce lower-than-expected returns on equity, Xcel’s capital plan funding could be pressured. The company plans to invest $34 billion in rate base growth from 2026 through 2030. Major institutional holders, including Vanguard and BlackRock, have maintained steady positions, indicating a long-term view on the regulatory recovery cycle.
The next immediate catalyst is the expected final order in Xcel’s Minnesota electric rate case, anticipated by 15 August 2026. The outcome will set allowed returns for a significant portion of the company’s rate base. Investors should watch for an authorized return on equity above 9.5%, which would be a positive signal.
Xcel Energy’s second-quarter 2026 earnings report, scheduled for 31 July 2026, will provide an update on capital project execution and O&M cost trends. A key level for the stock is the 200-day moving average near $60.80; a sustained break above this technical resistance could signal a shift in momentum.
Finally, monitor the Federal Reserve’s policy decisions. The next FOMC meeting is on 29 July 2026. A shift toward rate cuts would reduce the discount rate applied to utility dividend streams, making the sector more attractive to income-focused investors and potentially lifting sector valuations.
A Buy rating from a major institution like Truist is an analyst’s opinion that a stock’s price is expected to rise over a 12-month period. For retail investors, it signals that professionals see fundamental strength or a positive catalyst ahead. However, it is not a guarantee and should be one input among many in an investment decision. Retail investors should review the company’s financials, dividend history, and personal risk tolerance. Ratings can change with new data or market conditions.
Xcel Energy’s current dividend yield of 3.41% is approximately 87 basis points below the yield on the 10-year US Treasury note, which was 4.28% on 13 June 2026. This negative spread is common when interest rates are high, as bonds offer a risk-free return. Utilities compete for income-seeking capital, so their stock prices often face pressure when Treasury yields rise. A narrowing of this spread, typically via falling Treasury yields, is historically a tailwind for utility stock performance.
A rate case is a formal regulatory proceeding where a utility requests permission to increase the prices it charges customers to recover investments and operating costs. It is the primary mechanism for utilities to earn a regulated return on their massive capital investments in grids, power plants, and pipelines. A favorable outcome grants higher future revenue, directly boosting earnings and supporting dividend payments. An unfavorable decision can limit profit growth and strain the company’s ability to fund its capital plan, impacting long-term shareholder returns.
Truist’s maintained Buy rating hinges on Xcel Energy’s ability to convert regulatory approvals into stable earnings growth amid high interest rates.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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