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IDAIdacorp, Inc.

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Company Info

CEO

Lisa A. Grow

Location

Idaho, USA

Exchange

NYSE

Website

https://idacorpinc.com

Summary

IDACORP, Inc.

Company Info

CEO

Lisa A. Grow

Location

Idaho, USA

Exchange

NYSE

Website

https://idacorpinc.com

Summary

IDACORP, Inc.

AI Insights for IDA
2 min read

Quick Summary

IDACORP, Inc. is an energy holding company based in Boise, Idaho, primarily operating through its subsidiary, Idaho Power. The company is engaged in the generation, transmission, distribution, purchase, and sale of electric energy, mainly serving customers in southern Idaho and eastern Oregon. As of its last report, IDACORP served more than 650,000 customers, which includes residential, commercial, and industrial users. Its operations are supported by a robust infrastructure, including 17 hydropower generating plants and nearly 5,000 pole-miles of high-voltage transmission lines. In addition to its core utility operations, IDACORP also invests in real estate and housing tax credit projects, adding a diversified stream of income to its business model.

The Bull Case

  • IDACORP’s primary strengths include its stable, regulated utility operations and a long record of consistent dividend increases, which make the stock attractive to income-focused investors.
  • The company benefits from a strong financial position, with relatively low industry debt and a robust current ratio.
  • Its strategic focus on expanding clean energy capacity through hydropower and renewables gives it a competitive edge and positions it well for evolving regulatory and market demands.
  • The company’s disciplined cost management and capital investments support both operational efficiency and ongoing customer growth.
  • IDACORP’s positive reputation for reliability and service excellence among its customer base further strengthens its market presence.

The Bear Case

  • Despite its strengths, IDACORP faces certain vulnerabilities such as slower earnings growth compared to the broader US market and a relatively low dividend yield compared to industry-leading peers.
  • The company's stock is currently considered overvalued by some valuation models, which could limit near-term upside or expose the price to corrections.
  • Debt coverage, while better than some peers, is noted as a point of caution in analyst reports.
  • IDACORP’s exposure to seasonal and weather-related variability in hydropower generation may lead to unpredictable fluctuations in revenue.
  • Additionally, geographic concentration in Idaho and Oregon may limit growth if local market expansion slows.

Key Risks

  • Notable risks facing IDACORP include higher capital requirements to meet clean energy and infrastructure targets, which may affect future free cash flow.
  • Macroeconomic volatility, such as rising interest rates or inflation, could impact consumer demand and raise borrowing costs.
  • Regulatory uncertainties, especially regarding energy rates, renewable mandates, or environmental laws, pose a risk to consistent profitability.
  • The company is vulnerable to extreme weather events that could disrupt hydropower production or distribution infrastructure.

What to Watch

UpcomingDuring the most recent quarter, IDACORP's board approved an increase to its quarterly dividend, raising it to $0.88 per share, continuing the company’s streak of annual dividend increases since 2011.
UpcomingThe firm also adjusted its payout ratio target to 50%-60% to balance ongoing growth and capital investment needs.
UpcomingIDACORP made additional capital investments to expand its operational capabilities and accommodate customer growth in Idaho and Oregon.
ExpectedIn the coming quarter, IDACORP is expected to continue focusing on strategic capital spending to support customer and infrastructure expansion, particularly in clean energy investments.

Price Drivers

  • The stock price of IDACORP is driven by several factors, including its steady earnings growth, consistent dividend increases, and expansion in customer base.
  • Clean energy investments and the strength of its financial health, evidenced by lower industry debt, also play key roles.
  • Broader macroeconomic factors such as Federal Reserve interest rate decisions and inflation impact investor sentiment towards utilities as defensive stocks.
  • Analyst rating upgrades, future outlook on earnings per share, and IDACORP’s disciplined capital spending further contribute to market valuation.

Recent News

  • Recent news highlights IDACORP’s ongoing reputation as a solid income investment given its track record of 13 consecutive years of dividend increases and a current yield of 3.01%.
  • The board recently approved another dividend hike, and analysts have increased long-term EPS targets and company sales forecasts reflecting IDACORP's growth prospects.
  • The company’s fair value has been debated, with some models suggesting the stock is trading above calculated fair value, calling for investor diligence.
  • Several analyst reports and media articles have recommended IDACORP as a low-beta, defensive utility for investors seeking stability amid market volatility.

Market Trends

  • Overall, utility stocks are widely seen as a safe harbor during periods of economic volatility and high-interest rates, drawing investors seeking stable returns and reliable dividends.
  • There is a broad market shift towards clean energy, with utilities investing heavily in renewables and infrastructure upgrades to meet regulatory and consumer demands.
  • Dividend growth and defensive characteristics have increased the appeal of companies like IDACORP during times of uncertainty.
  • At the same time, valuation models suggest some utilities are trading at premia, raising concerns over potential near-term corrections.

AI-generated summary. Not investment advice. DYOR.

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