WEC Fair Value Estimate
$87.1925.8% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
WEC Energy Group Inc
Exchange: NYSESector: UtilitiesIndustry: Utilities - Regulated Electric
Wisconsin Energy Corporation is a diversified holding company. The Company operates primarily through two segments: a utility energy segment and a non-utility energy segment. Its primary subsidiaries are Wisconsin Electric Power Company (Wisconsin Electric), Wisconsin Gas LLC (Wisconsin Gas) and W.E. Power, LLC (We Power). Its utility energy segment consists of Wisconsin Electric and Wisconsin Gas, operating together under the trade name of We Energies. Its non-utility energy segment derives its revenues primarily from the ownership of electric power generating facilities for long-term lease to Wisconsin Electric. Its non-utility energy segment derives its revenues primarily from the ownership of electric power generating facilities for long-term lease to Wisconsin Electric. As of December 31, 2012, the Company have a 26.2% interest in ATC.
Did you know?
Capital expenditures increased by 58% from FY24 to FY25.
Current Price
$117.54
-1.04%GoodMoat Value
$87.19
25.8% overvaluedProfile
Valuation (TTM)
Market Cap$38.24B
P/E24.55
EV$58.74B
P/B2.81
Shares Out325.29M
P/Sales3.90
Revenue$9.80B
EV/EBITDA14.94
WEC Energy Group Inc (WEC) Valuation
GoodMoat Analysis
WEC Energy Group appears unfavourable from a value investing perspective, as the current price is significantly above the GoodMoat Target, offering a negative margin of safety. Its valuation multiples are high relative to its own history and the utility sector, while its financial quality indicators are mixed.
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Based on the GoodMoat Investment Framework, the valuation assessment for WEC Energy Group is unfavourable. The primary tool is the Discounted Cash Flow (DCF) analysis, which yields a GoodMoat Target of $87.19. Compared to the current price of $112.72, this indicates a negative margin of safety of approximately -29%. According to the framework's bands, any margin of safety below 10% is considered 'Unfavourable,' and a negative figure strongly suggests the stock is overvalued relative to its estimated intrinsic value. Supporting this view, the forward P/E of 23.5x is elevated. This is high for a regulated utility, a sector typically characterized by slower growth and lower multiples. While the framework notes a P/E of 25-26x can be reasonable for a 50% grower, WEC's revenue growth of 11.1% does not justify such a premium. Furthermore, the negative Free Cash Flow Yield of -2.8% and a high Debt/Equity ratio of 1.64 complicate the valuation picture, as these are not characteristics of a high-quality, asset-light business trading at a discount. The stock's price reflects a premium for its stability and dividend, but from a strict value perspective, it does not offer the required margin of safety. Analysis based on data as of 2024-05-15.
WEC Valuation Metrics
FCF$-1.02B
FCF Growth Rate—
EPS Growth (CAGR)—
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →WEC Valuation & Fair Value Analysis
WEC Energy Group Inc (WEC) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for WEC Energy Group Inc is $87.19. The current stock price is $117.54, suggesting the stock is 34.8% overvalued.
The price-to-earnings (P/E) ratio is 24.55. Price-to-book ratio is 2.81. Price-to-sales ratio is 3.90. Enterprise value to EBITDA is 14.94. PEG ratio is -0.76.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of WEC Energy Group Inc's intrinsic value.