EquityResearch

NORTHAMERICA|PowerUtilitiesMay19,2025

Video:OneQuickWatch-WhatDidWeLearnin

aVolatile1Q?

Weshareourthoughtsonourcoverageuniverse,post-1Qearnings,andthe

implicationsofthedraftbillfromtheHouseWaysandMeansCommittee.

Whilethemacrostormcloudsareclearing,westillseeopportunityindefensive

.

utilitiesatreasonablevaluationsasaneffectivehedgeagainstthetailrisk

macrotrade.ToppicksincludeXEL,EVRG,UGI,andIDA

Weseealotofforwardmomentumwithpositiverevisionstoguidancetocomein2Q/3Q.Our

mostoffensivepickisXELonpotentialMarshallFireresolutionandthefurthercapexupside.Mid-

capswecontinuetorecommendincludeUGIandEVRG,toanextentCNPandNI.TXNMoffers

near-termandeventdrivenopportunity.Separately,IDAonanongoingacceleratingbackdropto

capexspend.

OnthedevelopingIRA,wethinktheoutcomeisbetterthanexpected,withthephase-out

provisionsnotkickinginuntil2029forourcoverageuniverse.Thecommentaryaroundthese

sectorsbeingunsuitableforinvestmentisbeginningtodiminish.Weseearealopportunityfor

capitaltoflowbackintothesespaces,markingapromisingstarttotheoverallconversation.

Ourconversationswithregulatedutilitieshaveafavorabletiltwiththeconstructivestartingpoint

fromtheHousewithforeignentityofconcern(FOEC)themostproblematicelement.Still,most

managementteamsexpectareasonablereso