CMS Energy (NYSE:CMS) faced a downgrade as analysts at Wall Street Zen lowered their rating from “hold” to “sell” in a report released on October 30, 2023. This decision reflects growing caution among investors regarding the company’s stock performance amidst a backdrop of varied analyses from other financial institutions.
Recent Analyst Ratings
In recent weeks, several notable firms have revised their outlook on CMS Energy. On October 28, Wells Fargo & Company upgraded the stock to a “hold” rating. Shortly after, on October 15, KeyCorp raised its price target on CMS Energy from $76.00 to $79.00, assigning an “overweight” rating. Similarly, Weiss Ratings maintained a “buy (b-)” rating on October 8.
JPMorgan Chase & Co. adjusted its target price from $85.00 to $80.00, while also giving an “overweight” rating. Barclays further increased its price target from $78.00 to $82.00, reinforcing their “overweight” stance on the utility provider. Overall, nine research analysts have given CMS Energy a Buy rating, with five maintaining a Hold rating, leading to a consensus rating of “Moderate Buy” and a price target of $78.50, according to data from MarketBeat.com.
Financial Performance Highlights
On the financial front, CMS Energy reported its earnings results on October 30, revealing an earnings per share (EPS) of $0.93 for the quarter. This result surpassed the analysts’ expectations of $0.86 by $0.07. The company generated revenue of $2.02 billion, significantly exceeding the consensus estimate of $1.83 billion.
In terms of profitability, CMS Energy posted a net margin of 12.62% and a return on equity of 12.10%. This marks a notable increase, with revenue rising by 15.9% compared to the same quarter last year. Last year, the firm recorded an EPS of $0.84.
Looking ahead, the company has set guidance for FY 2026 at an EPS range of 3.800 to 3.870 and for FY 2025 at 3.560 to 3.600. Analysts predict an EPS of 3.59 for the current fiscal year.
Insider Transactions and Institutional Holdings
In related developments, Senior Vice President Brandon J. Hofmeister sold 4,000 shares of CMS Energy on November 3 at an average price of $72.47, amounting to a total transaction of $289,880.00. Following this sale, Hofmeister’s ownership decreased by 5.86%, leaving him with 64,259 shares, valued at approximately $4.66 million.
According to regulatory filings with the SEC, insiders currently hold 0.49% of the company’s stock. Institutional investors dominate ownership, with approximately 93.57% of shares held by various hedge funds and investment firms.
Notably, Norges Bank acquired a new stake in CMS Energy valued at about $238.95 million during the second quarter. Additionally, Price T Rowe Associates Inc. MD increased its stake by 16.1%, now owning 16,554,877 shares worth approximately $1.24 billion. Other institutional investors, such as Qube Research & Technologies Ltd and Soroban Capital Partners LP, also significantly boosted their holdings in the company.
About CMS Energy
CMS Energy Corporation operates primarily in Michigan, focusing on energy production and distribution. The company is structured into three segments: Electric Utility, Gas Utility, and Enterprises. Its Electric Utility segment is responsible for the generation, purchase, transmission, distribution, and sale of electricity from various sources, including coal, wind, gas, renewable energy, oil, and nuclear.
With these shifts in ratings and financial performance, CMS Energy remains a focal point for investors navigating the energy sector’s complexities.
