Morningstar | Alliant Energy's Capital Plan Supports Long-Term Growth
We are reaffirming our $38 per share fair value estimate after Alliant Energy reported third-quarter operating earnings of $0.87 per share, up from $0.73 in the same year-ago period. Management raised its 2018 EPS guidance to $2.13 to $2.19, up from the prior $2.04 to $2.18 range. We plan to increase our 2018 EPS estimate, but near-term weather-driven changes in earnings do not have a material change on our fair value estimate. Alliant's board of directors increased its 2019 dividend 6%, and we think future dividend increases will be in line with earnings growth.Alliant initiated 2019 EPS guidance of $2.17 to $2.31, in line with our $2.27 estimate. Management also updated its $7 billion capital expenditure plan in 2018 through 2022, with increased gas distribution investments. Alliant Energy currently expects $5.7 billion in capital spend from 2023 to 2027, which we think will support 5%-6% earnings growth during those years. We expect renewable energy investments will be key to its capital growth during this time frame.
In the quarter, earnings were boosted by favorable weather across Alliant's service territory as well as rate base increases from capital investments.
At the upcoming Edison Electric Institute utilities financial conference, we expect management to provide more color on long-term earnings growth expectations, capital growth opportunities, and capital funding plans.
Alliant Energy is a public utility holding company, engaged in providing regulated electric and natural gas service. The company's subsidiaries are: Interstate Power and Light Company, which is engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Iowa; Wisconsin Power and Light Company, which is engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Wisconsin; and Alliant Energy Finance, LLC, which manages a portfolio of wholly-owned subsidiaries and additional holdings.
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