Allete (NYSE:ALE) +3.3% in Monday's trading after Bank of America upgraded shares to Buy from Neutral with a $66 price target, raised from $53, believing the company offers robust double digit total return potential following its updated capital investment plan.
Allete (ALE) rolled forward its long-run capital plan now targeting $2.7B in aggregate investment over 2023-27, a $1.8B increase in the previous iteration of its plan, BofA's Julien Dumoulin-Smith said.
The analyst also noted the Minnesota Public Utilities Commission last week approved Minnesota Power's enhanced 15-year integrated resource plan that should add 400 MW wind and 300 MW solar; Allete (ALE) owns Minnesota Power.
After previously forecasting 5% rate base growth, Dumoulin-Smith now sees the latest update to 8% over the 2022-27 period likely driving a constructive management update with a formal raise to 6%-8% EPS compound annual growth rate target in February.
Allete (ALE) recently reported Q3 GAAP earnings of $0.59/share on revenues of $388M.