Evergy, Inc. EVRG benefits from a rise in data center demand and customer expansion driven by economic growth in its service territory, boosting its financial performance. Strategic investments, acquisitions and joint ventures support renewable expansion and long-term growth.
This Zacks Rank #3 (Hold) company faces risks due to unplanned outages from aging assets.
EVRG’s Tailwinds
Evergy benefits from expanding its customer base, driven by economic development in its service territory, supporting its financial performance. The company increased its large-customer pipeline to more than 15 gigawatts (GW).
Evergy is aided by increasing electricity load growth from data center demand, enhancing revenue visibility and supporting stability. During first-quarter 2026, EVRG signed contracts for four major data center projects, adding two new facilities and expanding two existing sites. The project accounts for 1.9 GW of steady-state peak demand, representing about 20% system increase. The project is expected to add 1,300 MW in retail load growth through 2030. EVR expects load growth of nearly 2-3.5 GW from multiple customers.
The company expands its existing operations through joint ventures and strategic acquisitions, which creates long-term value. Evergy formed a joint venture with American Electric Power, named Transource Energy, LLC, to develop competitive electric transmission projects across the United States. The company holds a 13.5% ownership stake in the venture. Meanwhile, Evergy Missouri West acquired the Foxtrot solar facility assets, with operations expected to commence by summer 2027, supporting clean energy growth.
EVRG’s strategic capital investment for renewable expansion and infrastructure development supports grid modernization, improves operational efficiency and service reliability, thus boosting long-term growth. The company aims to make a $21.6 billion investment in 2026-2030, a 24% increase from its previous five-year plan, including more than $3 billion for new generation capacity. These Investments are expected to drive 11.5% rate base growth, with 6-8% long-term EPS growth target through 2030.
EVRG’s Headwinds
EVRG was formed through a merger; consequently, it inherited some aging properties that require maintenance on a regular basis. Despite maintenance, any unplanned outages of the old assets can result in service disruptions, increase operational expenses and disrupt operations.
Evergy’s performance largely depends on the outcome of retail rate proceedings in Kansas and Missouri. Failure to timely recover full investment costs of capital projects could have a material impact on the business.
Price Performance of EVRG
In the past three months, Evergy shares have rallied 11.1% compared with the industry’s 11.0% growth.
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Stocks to Consider
Some better-ranked stocks in the same industry are CMS Energy Corporation CMS, Duke Energy Corporation DUK and FirstEnergy Corp. FE. All stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CMS, DUK and FE have dividend yields of 2.87%, 3.23% and 3.46%, respectively, which are better than the Zacks S&P 500 composite’s yield of 1.41%.
The Zacks Consensus Estimate for CMS Energy, Duke Energy and FirstEnergy’s 2026 EPS is pegged at $3.86, $6.70 and 2.73%, suggesting year-over-year growth of 6.93%, 6.18% and 7.06%, respectively.
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This article originally published on Zacks Investment Research (zacks.com).