PPL (PPL) Stock Sinks As Market Gains: Here's Why

PPL (PPL) closed at $36.35 in the latest trading session, marking a -1.06% move from the prior day. This move lagged the S&P 500's daily gain of 0.79%. Elsewhere, the Dow saw an upswing of 0.26%, while the tech-heavy Nasdaq appreciated by 1.52%.

Shares of the energy and utility holding company witnessed a gain of 6.43% over the previous month, beating the performance of the Utilities sector with its gain of 2.96%, and the S&P 500's loss of 1.82%.

The investment community will be paying close attention to the earnings performance of PPL in its upcoming release. On that day, PPL is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 9.38%. At the same time, our most recent consensus estimate is projecting a revenue of $2.17 billion, reflecting a 7.04% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.95 per share and revenue of $9.69 billion, which would represent changes of +7.73% and +7.22%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for PPL. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% higher. PPL presently features a Zacks Rank of #3 (Hold).

With respect to valuation, PPL is currently being traded at a Forward P/E ratio of 18.85. This indicates a premium in contrast to its industry's Forward P/E of 18.44.

Also, we should mention that PPL has a PEG ratio of 2.51. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Utility - Electric Power stocks are, on average, holding a PEG ratio of 2.82 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 33% of all 250+ industries.

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The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PPL in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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