Morningstar | Ameren Delivers Strong First Quarter
We are reaffirming our $62 per share fair value estimate, no-moat rating, and stable moat trend after Ameren reported first-quarter operating EPS of $0.78, compared with $0.62 in the same year-ago period. Management reaffirmed its 2019 earnings guidance range of $3.15 to $3.35. Management expects long-term 6%-8% EPS growth through 2023, driven by 8% annual rate base growth.Ameren continues to work toward owning at least 700 megawatts of wind generation by 2020. To date, Ameren has agreements to secure 557 MW of wind in Missouri. The secured wind generation has been approved by regulators and is part of Ameren's five-year capital plan.
We expect Ameren can secure the remaining wind capacity soon. We also wouldn't be surprised to see additional wind investments beyond the 700 MW. Additional investments would be accretive to the current capital plan and our fair value estimate. In Missouri, Ameren filed a 60-day notice at the state commission for its intent to file a rate case as early as July.
In Illinois, House Bill 3152 and Senate Bill 2080 unanimously passed each chamber's Public Utilities Committee. The bill would extend the current formula rate-making 10 years beyond the current expiration of Dec. 31, 2022. The bill has served investors and the state well by allowing a constructive framework for grid modernization investments in the state. The legislative session ends May 31, and we think extension of the regulation is a sign that lawmakers and regulators are committed to a constructive Illinois regulatory environment.
Earnings in the quarter were supported by capital investments, particularly transmission and natural gas and electric distribution investments. Higher electric sales due to favorable weather and performance incentives in Missouri also helped earnings.
Ameren is a public utility holding company. Through its subsidiary, Union Electric Company, the company operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri. Through its subsidiary, Ameren Illinois Company, the company operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois. Through its Ameren Transmission Company of Illinois subsidiary, the company operates a Federal Energy Regulatory Commission rate-regulated electric transmission business. The company also has other subsidiaries that conduct other activities, such as providing shared services.
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