WEC - Embedded Expectations Analysis - 2021 06 11
WEC Energy Group, Inc. (WEC:USA) currently trades near recent highs relative to UAFRS-based (Uniform) earnings, with a 39.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about their renewable energy projects, energy and asset mix, and policy headwindsSpecifically, management may lack confidence in their ability to capitalize on Foxconn opportunities, attract more prospects in Southeast Wisconsin, and benefit from the pick-up in the M&A cycle. Moreover, they may be overstating the progress of their renewable energy projects and the potential of their Thunderhead wind investment. Furthermore, management may lack confidence in their ability to reshape their energy and asset mix and achieve their greenhouse gas reduction goals, and they may be downplaying concerns about the impact of policy headwinds in Illinois. Management may also be concerned about pipeline project due diligence and the impact of FERC's proposed transmission incentive changes. Finally, management may lack confidence in their ability to meet their earnings and dividend payout ratio guidance, and they may have concerns about the economic recovery's impact on their performance
WEC Energy Group is a holding company. Through its subsidiaries, the company provides regulated natural gas and electricity, and nonregulated renewable energy. The company's segments include: Wisconsin, which generates and distributes electric energy and provides retail natural gas distribution service; Illinois, which includes the natural gas utility operations; Electric Transmission, which owns, maintains, monitors, and operates electric transmission systems in Wisconsin, Michigan, Illinois, and Minnesota; and Non-Utility Energy Infrastructure, which owns and leases generating facilities to its Wisconsin Electric Power Company subsidiary and owns underground natural gas storage facilities in Michigan.
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