Ameren's (AEE) long-term earnings growth prospects are improving as rising data center demand and additional contracted load drive higher infrastructure investment, UBS Securities said.
The brokerage said in a note Thursday that about 2.2 gigawatts of signed electric service agreements, along with an assumed 600 megawatts of additional contracts, support a step-up in capital deployment that could be formalized during the company's Q3 update.
UBS raised its 2027 and 2028 EPS estimates to $5.86 and $6.37 from $5.80 and $6.28 previously.
The investment firm also said the valuation remains undemanding and noted that Ameren trades at only a modest premium to peers despite stronger long-term growth prospects. The firm sees this gap as unjustified given asset quality and execution and expects potential for a higher multiple over time.
UBS reiterated its buy rating and $127 price target.
Shares of Ameren rose nearly 3% in Friday trading.
Price: $110.06, Change: $+3.07, Percent Change: +2.87%