EVERGY, INC. (EVRG): what the price assumes

boothcheck covers EVERGY, INC. (EVRG) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-26.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/EVRG

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

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% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

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.

Families that justify the price: Relative, 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 5.5%); the inversion above states its own rate.

Per-Model Detail (n=17)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Evergy closed the March quarter holding 18.4 million dollars of cash against roughly 15.6 billion of borrowings, which is not distress but a deliberate design: a regulated utility keeps almost nothing idle and funds itself from credit lines and the bond market.
• Demand is the story and the filing says so plainly: "The Evergy Companies are experiencing current and projected load demands that exceed recent experience, creating a business need for new power generating resources and transmission facilities."
• Second-quarter results are due August 6, 2026, but the more consequential date is whatever the Missouri commission decides on the rate application Evergy Metro filed in February 2026, which asked for a return on equity of 10.5%.

Bull Case

Read the balance sheet cold and it looks alarming. A company worth roughly twenty billion dollars in the market ended March with 18.4 million dollars of cash on hand and about 15.6 billion of borrowings. Stated that baldly, it sounds like a firm one missed payment from a problem. It is not, and understanding why is the beginning of understanding what a regulated utility actually is. Evergy does not need a cash buffer, because its revenue is set by a state commission and arrives every month from more than a million meters that cannot switch supplier. It keeps essentially nothing idle, draws on credit lines when it needs to, and issues bonds against a rate base that regulators have already agreed customers will pay for. Idle cash would be capital earning nothing when it could be earning a regulated return.

What that capital is being pointed at has changed. The 10-K is direct: "The Evergy Companies are experiencing current and projected load demands that exceed recent experience, creating a business need for new power generating resources and transmission facilities." For most of the past two decades electricity demand in the American Midwest went sideways, and a utility's only route to earnings growth was replacing old plant with new plant. Growing load changes the arithmetic entirely: the same regulatory machinery that lets Evergy earn on replacement capital lets it earn on expansion capital, and expansion capital is a much bigger pool.

The commercial terms attached to that growth matter more than the headline. Missouri regulators approved a large-load tariff framework in November 2025 that the 10-K describes as being "designed to establish a tariff framework for large load customers while including safeguards for existing customers to ensure that new large customers pay their cost of service and help defray costs that might be experienced by other customers". The concern with building generation for data centres is that the data centre leaves and existing households inherit the bill. A tariff that makes the new customer pay its own cost of service is the specific answer to that concern, and it was settled before the plants were built rather than after.

The operating business is already efficient by cohort standards. Evergy converts about 26.6% of revenue into operating profit. Among the large regulated names, only NEE at 29.5% and DUK at 27.2% run higher; SO and AEP both sit at 24.2%, EXC at 21.0% and XEL at 18.0%. That is a smaller utility holding its own against companies three and four times its revenue, and it does so while paying out a dividend of $2.68 a share against reported earnings of $3.76, which leaves real room before the payout becomes a question.

The share count is the quiet evidence. It has grown about 0.6% a year over the past four years. A utility funding a large construction programme usually issues equity steadily, diluting the holders who are meant to benefit from the growth. Evergy has largely not, which means the earnings from whatever gets built land on very nearly the same number of shares that exist today.

Bear Case

Here is the sentence a holder has to be comfortable with. Evergy earns a trailing return on shareholders' equity of about 8.7%, and the return that equity is reckoned to cost is closer to 9.3%. The company is, on trailing numbers, destroying a small amount of value each year, and the stock trades at roughly twice its book value of $43.11 a share. Paying two dollars for one dollar of equity that earns less than it costs only makes sense as a bet on that gap closing.

The company knows it. In February 2026 Evergy Metro filed an application with the Missouri commission asking for about 140 million dollars of additional retail revenue, and the request was built on a requested return on equity of 10.5%. Asking is not receiving. Commissions rarely grant the requested figure, the process runs many months, and the 10-K notes that rates are subject to "regulatory rate-setting processes and annual earnings oversight", which is the polite phrase for a mechanism that also works in the other direction when a utility earns more than its allowance.

Growth is the second problem, and it is the one the load-growth narrative is meant to fix. Revenue has been compounding in the low single digits, slower than every large peer in the cohort: EXC grew 4.6% last year, DUK 7.2%, XEL 7.9%, SO 8.3%, AEP 8.5% and NEE 10.3%. A business growing at 3% while trading at a premium to the methods that measure what it currently earns needs the data-centre load to be both large and durable, and every megawatt of it has to survive a permitting process, a construction schedule and a customer whose own capital plans change annually.

The financing is the mechanism through which any disappointment would show up. Net borrowings run about 9.7 times operating profit and operating profit covers the interest bill about 2.5 times over. Neither figure is unusual for the sector, and both are unforgiving of a bad outcome. Every dollar of new plant has to be funded before a single dollar of new rate revenue arrives, and the gap between the two is measured in years. In the March quarter the company drew 555.0 million dollars on a term loan facility and added to short-term borrowings while investing 756.6 million. That is the shape of a utility outspending its own operations, which is normal, and which is also exactly the position in which a rate-case disappointment hurts most.

The valuation carries the same message from a different direction. Roughly 22 times operating income places Evergy in the upper half of its peer group rather than the bargain end of it, and the methods that value the company against its assets and its current earnings power land far under today's level. Only the projections of future cash flow reach it. That is the definition of a bet on durability rather than on what the business is currently producing.

Valuation

Two facts set the frame and they pull against each other. The stock changes hands at about twice the $43.11 of book value behind each share. The return actually earned on that book value is about 8.7%, which is a little under what the equity is reckoned to cost. A regulated utility earning below its cost of equity should logically trade near book, not at a multiple of it. Everything else in this section is an attempt to explain the difference.

Most of the valuation methods do not explain it; they simply record it. The approaches built on book value and on the returns generated from it land far below today's level, with the price sitting roughly 122% above where that family centres. The approaches that capitalise current earnings power land further away still, about 161% above their centre. Peer multiples put the price about 36% above where that family sits. Only the projections of future cash flow reach the current level. When a single family of method supports a price and three do not, the price is a bet on durable compounding that static frames cannot see, and naming it that way is more honest than pretending the other three are simply wrong.

One number in the middle deserves attention because it is the least assumption-heavy. Applying a utility-sector enterprise-value-to-EBITDA reference of 13 to trailing EBITDA of 2.74 billion dollars lands almost exactly at the current level. On the crude measure the sector actually trades on, Evergy is priced like a utility. It is the returns-based lenses, not the multiple-based ones, that object.

Inverting the price gives a reading that should be held loosely, and the record itself flags it as unreliable. On that arithmetic today's level implies a bound rather than a forecast: the price sits below what even a steady 5% a year decline in operating profit would warrant. That is a low bar and it arrives with a caveat, because it is computed against a terminal value growing at 4% a year forever, discounted at a rate only slightly above it. A narrow spread of that kind does most of the work in any such calculation, which is precisely why the multiple-based and returns-based views are worth more weight here.

Against the peer group the position is mixed rather than flattering. About 22 times operating income puts Evergy in the upper half of the large-utility range, and it earns that with an operating margin of about 26.6%, behind only NEE at 29.5% and DUK at 27.2%. But the balance sheet leaves no slack: 18.4 million dollars of liquid holdings against roughly 15.6 billion of borrowings, net borrowings near 9.7 times operating profit, and interest covered about 2.5 times. That structure is standard for the sector and it means the equity is a thin sliver on top of a large fixed claim. The February rate application asking for a 10.5% allowed return is the single event with the most leverage on whether the gap between what this equity earns and what it costs actually closes.

Catalysts

The decision that matters most is sitting with a state commission rather than on an earnings calendar. Evergy Metro filed its Missouri rate application in February 2026 seeking roughly 140 million dollars of additional retail revenue, built on a requested return on equity of 10.5%. Missouri rate cases run most of a year from filing to order, and the outcome sets the earning power of a large part of the business for the period that follows. The number to watch is not whether the request is granted but how far short of it the order lands.

Second-quarter results are scheduled for August 6, 2026. The March quarter showed the shape of the current phase: investing outflows of 756.6 million dollars, a 555.0 million dollar draw on a term loan facility and a small addition to short-term borrowings. Spending running well ahead of what operations produce is what a utility in a build cycle looks like, and the summer quarter is the one where weather and load actually show up in the revenue line.

Broker targets have clustered tightly and moved in both directions this month, which is a fair reading of a name whose next move depends on a regulator. Citi went to 97 dollars from 95 and BTIG came down to 97 dollars from 99. BMO Capital moved to 92 dollars from 88 and Bank of America to 91 dollars from 88. Four revisions inside a week, all landing within a narrow band above where the shares trade, describe an analyst community that agrees on the mechanics and is waiting on the same commission order everyone else is.

Peer Cohorts (Per Segment, With Filing Citations)

Electric Utility (reported)

• NEE (NextEra Energy Inc)
• FY2025 10-K: …iso4217:USD xbrli:shares nee:agreement nee:county xbrli:pure utr:kWh utr:MW nee:unit nee:facility utr:Btu utr:MWh utr:MMBTU utr:bbl nee:customer nee:state nee:investment utr:mi nee:variable_interest_entity utr:Rate nee:segment 0000753308 2025-01-01 2025-12-31 0000753308 nee:FloridaPowerLightCompanyMember 2025-01-01…
• FY2025 10-K: …the acquisition and retirement of an electric generation facility (see Note 1 - Rate Regulation) and capacity payments related to PPAs; • Energy Conservatio n - costs associated with implementing energy conservation programs; and • Environmental - certain costs of complying with federal, state and local environmental…
• DUK (DUKE ENERGY CORPORATION)
• FY2025 10-K: ElectricityUsRegulatedMember duk:CommercialMember duk:ProgressEnergyMember duk:ElectricUtilitiesandInfrastructureMember 2025-01-01 2025-12-31 0001326160 us-gaap:ElectricityUsRegulatedMember duk:CommercialMember duk:DukeEnergyProgressMember duk:ElectricUtilitiesandInfrastructureMember 2025-01-01 2025-12-31 0001326160…
• FY2025 10-K: …duk:ResidentialMember duk:DukeEnergyCarolinasMember duk:ElectricUtilitiesandInfrastructureMember 2024-01-01 2024-12-31 0001326160 us-gaap:ElectricityUsRegulatedMember duk:ResidentialMember duk:ProgressEnergyMember duk:ElectricUtilitiesandInfrastructureMember 2024-01-01 2024-12-31 0001326160…
• SO (SOUTHERN CO)
• FY2025 10-K: 00092122 so:RetailElectricMember so:ElectricUtilitiesMember 2024-01-01 2024-12-31 0000092122 so:WholesaleElectricMember so:ElectricUtilitiesMember 2024-01-01 2024-12-31 0000092122 so:OtherRevenueMember so:ElectricUtilitiesMember 2024-01-01 2024-12-31 0000092122 so:ElectricUtilitiesMember 2024-01-01 2024-12-31…
• FY2025 10-K: …2023-01-01 2023-12-31 0000092122 us-gaap:CorporateNonSegmentMember 2023-01-01 2023-12-31 0000092122 us-gaap:IntersegmentEliminationMember 2023-01-01 2023-12-31 0000092122 us-gaap:OperatingSegmentsMember so:TraditionalElectricOperatingCompaniesMember 2023-12-31 0000092122 us-gaap:OperatingSegmentsMember…
• AEP (AMERICAN ELECTRIC POWER CO INC.)
• FY2025 10-K: …srt:AffiliatedEntityMember aep:SouthwesternElectricPowerCompanyMember 2023-01-01 2023-12-31 0000004904 aep:AEPTexasInc.Member srt:AffiliatedEntityMember 2023-01-01 2023-12-31 0000004904 aep:AppalachianPowerCompanyMember srt:AffiliatedEntityMember 2023-01-01 2023-12-31 0000004904…
• FY2025 10-K: …utr:MMBTU utr:gal aep:employee utr:WK aep:metric aep:line aep:generatingPlant aep:auction 0000004904 2025-01-01 2025-12-31 0000004904 aep:AEPTexasInc.Member 2025-01-01 2025-12-31 0000004904 aep:AEPTransmissionCompanyLLCMember 2025-01-01 2025-12-31 0000004904 aep:AppalachianPowerCompanyMember 2025-01-01 2025-12-31…
• D (DOMINION ENERGY, INC)
• FY2025 10-K: …riders; • A $173 million increase in sales to electric utility retail customers, primarily due to an increase in cooling degree days during the cooling season ($107 million) and an increase in heating degree days during the heating season ($66 million); • A $155 million increase in sales to electric utility retail…
• FY2025 10-K: …2025-12-31 0000715957 d:ThreeSixtyFourDayTermLoanFacilityOneMember 2023-07-31 0000715957 d:CreditFacilityMaturingInOctoberTwoThousandTwentyFourMember d:ThreeSixtyFourDayTermLoanFacilityMember 2023-10-31 0000715957 d:VirginiaElectricAndPowerCompanyMember…
• EXC (EXELON CORPORATION)
• FY2025 10-K: Registrants) and natural gas and gas distribution services (PECO, BGE, and DPL) to residential, commercial, industrial, and governmental customers through regulated tariff rates approved by state regulatory commissions. Delivery of electricity and/or natural gas. Over time (each day) as the electricity and/or natural…
• FY2025 10-K: …injection and absorption of power during electric supply and demand imbalances. As forecasted load increases, the lack of sufficient energy storage growth may also lead to greater price volatility and challenges in power services for customers. The Utility Registrants' respective ability to deliver electricity, their…
• XEL (XCEL ENERGY INC)
• FY2025 10-K: …transmits, distributes and sells electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Wisconsin also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas. Natural gas customers 0.1 million Total assets…
• FY2025 10-K: …Protection Agency ERCOT Electric Reliability Council of Texas FASB Financial accounting standards board FERC Federal Energy Regulatory Commission IRS Internal Revenue Service MPUC Minnesota Public Utilities Commission MPSC Michigan Public Service Commission NDPSC North Dakota Public Service Commission NERC North…

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.