EVERGY, INC. (EVRG): what the price requires
The current priced-in claim for EVERGY, INC. (EVRG) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EVRG
Headline
| Field | Value |
|---|---|
| Ticker | EVRG |
| Company | EVERGY, INC. |
| Current price | $86.46/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 26.6% |
| Multiple paid | 22x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 6.1% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~19.6%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.14σ |
| cohort percentile (of 70 peers) | 59 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.20x | 5 | expensive |
| Earnings | 2.59x | 3 | expensive |
| Relative | 1.35x | 5 | expensive |
| Growth | 0.91x | 4 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.7%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $211.39 | 0.41x | yes | Reference only (OCF-based, capex excluded): OCF $2.0B |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $82.07 | 1.05x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.8x / 20.0x / 23.2x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | $514.70 | 0.17x | yes | DPS $2.68, g=8.7% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $43.25 | 2.00x | yes | Stage 1: 1% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $40.48 | 2.14x | yes | BV/sh $43.11, ROE (TTM) 8.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $39.22 | 2.20x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $61.19 | 1.41x | yes | Rev $6.0B, growth 3% (input: historical growth; tapered), Terminal P/S: 2.8x / 3.4x / 3.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $45.12 | 1.92x | yes | EPS $3.76, growth 1% (input: historical EPS growth), PEG=22.11 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $17.29 | 5.00x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.38B × (1−21%) / WACC 5.7% → EPV (no growth) |
| Residual Income | Asset | $39.01 | 2.22x | yes | BV $43.11 + 5yr PV of (ROE (TTM) 8.7% − Kₑ 9.3%) × BV; BV grows 5.6%/yr |
| Graham Number | Asset | $60.39 | 1.43x | yes | √(22.5 × EPS $3.76 × BVPS $43.11) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $87.13 | 0.99x | yes | EBITDA $2.74B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $33.37 | 2.59x | yes | EPS $3.76 × (8.5 + 2×1.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $7.54 | 11.47x | yes | BV $43.11 × (ROIC 1.0% / WACC 5.7%) |
| P/Sales Sector | Relative | $63.99 | 1.35x | yes | Revenue $6.03B × sector P/S 2.5x |
| PEG Fair Value | Relative | $18.80 | 4.60x | yes | EPS $3.76 × (PEG 1.5 × growth 1.0% (input: historical EPS growth)) → PE 1.6x |
| Earnings Yield | Earnings | $40.65 | 2.13x | yes | EPS $3.76 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $15.6b |
| Net debt / NOPAT (after-tax) | 12.24x |
| Net debt / operating income (pre-tax) | 9.67x |
| Interest coverage | 2.5x |
| Share count CAGR (dilution) | 0.6% |
| Burning cash | no |
Bullet Takeaways
- Evergy is a regulated electric utility in Kansas and Missouri whose single most important number just changed: management raised its retail load growth outlook to a 7% to 8% compound rate through 2030, anchored by 3 gigawatts of contracted large-customer demand, turning a slow-growth utility into a demand-led one.
- The biggest specific risk is the balance sheet against regulated returns: net debt sits near $15.6 billion, about ten times operating income, with interest coverage around 2.4 times, funded into a capital plan whose payoff depends on regulators allowing recovery.
- What moves the stock next is execution on large-load contracts and rate cases: the company signed its fifth large-customer agreement and approved a tariff framework for big new loads that the filing notes the Missouri commission "approved in November 2025".
Bull Case
One number reframes Evergy: a retail load growth outlook of 7% to 8% a year through 2030. For a regulated utility, load growth is the lever that matters most, because earnings are the allowed return on the rate base, and rate base grows to serve load. A utility that suddenly needs to build generation and grid for fast-rising demand has the cleanest path a regulated business can have to compounding earnings, since the spending is justified by customers asking to be served rather than by a contentious rate case. Management has anchored that outlook on 3 gigawatts of contracted large-customer demand and its fifth large-customer electric service agreement, and the regulatory groundwork is in place: the filing describes a large-load tariff framework that "the MPSC approved in November 2025", designed to set terms for big new loads "while including safeguards for existing customers".
The earnings cadence already reflects the shift. First-quarter 2026 adjusted earnings per share rose to $0.69, ahead of the consensus near $0.65, on revenue of $1.44 billion that beat estimates, with weather-normalized demand up 4.7%. Management reaffirmed full-year adjusted EPS guidance of $4.14 to $4.34 and a long-term growth target of 6% to 8% and above through 2030, with annual growth projected to exceed 8% beginning in 2028. A utility guiding to high-single-digit earnings growth is a different proposition from the low-single-digit grower the sector usually offers.
The capital plan turns the demand into rate base. The filing describes adding "new highly-efficient natural gas generation resources, renewable generation and storage to support economic growth in the region", and a recent rate request from Evergy Kansas Central reflected "a return on equity of 10.5 % (with a capital structure composed of 52 % equity)", a constructive allowed return on the investment being made. Pair a roughly 3.3% dividend with high-single-digit earnings growth and the total-return math is attractive for an income investor: the demand is contracted, the tariff framework is approved, and the growth is the kind regulators tend to support because it spreads fixed costs across more kilowatt-hours.
Bear Case
The qualitative point comes first, before any ratio: Evergy is a slow-growth, capital-hungry utility being repriced as a growth stock on the strength of contracts that have only just begun to convert. The static valuation methods register the gap. Book value plus profitability and earnings power both read the price as well above what they support, anchored on a return on equity in the high single digits against a higher cost of equity, and the multiple sits in the upper half of the utility peer range. Only the forward-growth method reaches the price. In plain terms, what you are paying for is the load-growth story arriving on schedule; strip that conviction out and the methods that look at what Evergy currently earns say the stock is expensive.
The disconnect matters because the growth is not guaranteed and the cost of pursuing it is already on the books. Large-load demand is concentrated in a small number of data center and industrial counterparties whose plans can change, and the rate base being built to serve them is real spending today against revenue that depends on those customers showing up and on regulators allowing full recovery. The filing flags the mechanics that can pinch returns in the meantime, noting that Evergy Kansas Central "will not be able to accrue AFUDC on these amounts once the CWIP rider becomes effective", a reminder that the path from capital spent to earnings recognized runs entirely through regulatory decisions.
The balance sheet leaves little room for a stumble. Net debt near $15.6 billion sits at roughly ten times operating income, with interest coverage around 2.4 times, which is heavy, and a 7% to 8% load-growth plan means years of elevated capital spending that must be financed with more debt and equity. The dividend consumes a large share of earnings, the rate base growth must be funded externally, and a return on equity below the cost of equity on the current book is the asset method's way of saying the company has not yet earned its hurdle on the capital it carries. The bull answer is that the new load changes that arithmetic; the bear answer is that the price already assumes it has, and a regulated utility cannot keep the upside if a commission decides customers should.
Valuation
Begin with what the price assumes, because it is doing all the work. At roughly 22 times company-wide operating income, the multiple sits in the upper half of the utility peer range, and the methods divide sharply: asset value and earnings power read the price as richly valued, and only the forward-growth family reaches it. That pattern is the signature of a durability premium, the market paying for compounding the static frames cannot capture. For Evergy the compounding is the contracted load growth, so the entire premium rests on the 7% to 8% retail growth outlook converting into rate base and earnings as guided.
The peer frame makes the premium visible. Evergy trades alongside utilities such as Ameren, PPL, and Southern Company, and its multiple sits toward the rich end, which is the market awarding it credit for a large-load pipeline that not every peer carries at the same scale. A constructive regulatory backdrop supports the case: the recent Kansas Central request reflected a 10.5% allowed return on equity at a 52% equity layer, the kind of authorized return that makes rate base growth genuinely value-accretive. The valuation question is not whether the assets exist; it is whether the high-single-digit earnings growth that justifies the premium materializes on the timeline management has guided.
Solvency is the boundary on the bet, and it is leveraged. Net debt near $15.6 billion at about ten times operating income, with coverage around 2.4 times, is the structure that funds the build, and the capital plan through 2030 will keep that leverage elevated. Regulated cash flows are dependable and the company is not burning cash, so the risk is not insolvency; it is that an upper-half multiple, a stretched balance sheet, and a growth plan still in its early innings together leave the price dependent on execution that has barely started. The buyer is underwriting the load growth, not the assets already in the ground.
Catalysts
The first quarter of 2026 advanced the central thesis. Evergy reported adjusted earnings per share of $0.69, ahead of the consensus near $0.65, on revenue of $1.44 billion that topped estimates, with weather-normalized demand growing 4.7%. The strategic news was the load pipeline: the company signed its fifth large-customer electric service agreement and disclosed that, with contract amendments, peak demand from large-load agreements now totals 3 gigawatts, which let it raise the retail load growth outlook to a 7% to 8% compound rate through 2030. Management reaffirmed full-year adjusted EPS guidance of $4.14 to $4.34 and a long-term growth target of 6% to 8% and above, with growth projected to exceed 8% from 2028.
The Street is constructive and moved targets higher. The consensus rating is Buy with an average target near $90.46, above the current price, and recent revisions ran up: UBS raised its target to $91 from $88, and Citi lifted its to $95 from $89. The catalysts that matter from here are regulatory and contractual. Additional large-customer agreements and favorable outcomes in the pending rate cases would validate the load-growth outlook and the capital plan behind it, while any slippage in the data center and industrial timeline is the development that would test a price the static methods already call full.
Peer Cohorts (Per Segment, With Filing Citations)
Electric Utility (reported)
- NEE (NextEra Energy Inc)
- (no filing in the citation store)
- DUK (DUKE ENERGY CORPORATION)
- (no filing in the citation store)
- SO (SOUTHERN CO)
- (no filing in the citation store)
- AEP (AMERICAN ELECTRIC POWER CO INC.)
- (no filing in the citation store)
- D (DOMINION ENERGY, INC)
- (no filing in the citation store)
- EXC (EXELON CORPORATION)
- (no filing in the citation store)
- XEL (XCEL ENERGY INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, May 2026 · analyst notes, 2026