Investors should take a selective approach toward utility stocks in 2025 as the incoming Trump administration could create a more challenging environment for the sector, according to KeyBanc.
AI has translated into tangible electricity load and earnings growth revisions for the sector, Karp said.
If inflation stagnates at above-average levels and then accelerates, the Federal Reserve could respond with higher interest rates that would hit the sector, the analyst told clients.
At the same time, electricity demand from AI and manufacturing returning to the U.S. could help offset these inflationary headwinds for the sector, according to Karp.
KeyBanc maintains the equivalent of a buy rating on the regulated utilities Xcel Energy , WEC Energy Group , CMS Energy Corp. , FirstEnergy Corp. and Portland General Electric .
Persons:
Trump, Sophie Karp, Karp, Xcel
Organizations:
Utilities, Federal, KeyBanc, Xcel Energy, WEC Energy, CMS Energy Corp, FirstEnergy Corp, Portland General Electric, WEC, Constellation Energy
Locations:
U.S, Ohio