PPL Corp (PPL): what the price assumes
boothcheck covers PPL Corp (PPL) 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 2026-06-27.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/PPL
Headline
| Field | Value |
|---|---|
| Ticker | PPL |
| Company | PPL Corp |
| Current price | $34.20/sh |
| Composition | Kentucky Regulated 42% / Pennsylvania Regulated 34% / Rhode Island Regulated 24% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Multiple paid | 20x 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 6.2% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.49σ |
| cohort percentile (of 70 peers) | 46 |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.09x | 5 | expensive |
| Earnings | 1.94x | 3 | expensive |
| Relative | 0.68x | 2 | justifies |
| Growth | 0.86x | 4 | justifies |
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 5.6%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $41.64 | 0.82x | yes | Exit EV/EBITDA: 10.6x / 12.6x / 14.6x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | — | — | no | P/E 20x (static sector reference · 2026-04), scenarios: 16.5x / 20.0x / 23.5x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | $102.43 | 0.33x | yes | DPS $1.07, g=8.1% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $38.09 | 0.90x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $17.52 | 1.95x | yes | BV/sh $19.96, ROE (TTM) 8.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $16.39 | 2.09x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $26.37 | 1.30x | yes | Rev $9.4B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.7x / 3.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $42.28 | 0.81x | yes | EPS $1.63, growth 26% (input: historical EPS growth), PEG=0.81 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $7.62 | 4.49x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.73B × (1−19%) / WACC 5.6% → EPV (no growth) |
| Residual Income | Asset | $16.21 | 2.11x | yes | BV $19.96 + 5yr PV of (ROE (TTM) 8.1% − Kₑ 9.3%) × BV; BV grows 5.3%/yr |
| Graham Number | Asset | $27.06 | 1.26x | yes | √(22.5 × EPS $1.63 × BVPS $19.96) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $3.54B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $52.59 | 0.65x | yes | EPS $1.63 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.35 | 5.39x | yes | BV $19.96 × (ROIC 1.8% / WACC 5.6%) |
| P/Sales Sector | Relative | — | — | no | Revenue $9.41B × sector P/S 2.5x |
| PEG Fair Value | Relative | $61.13 | 0.56x | yes | EPS $1.63 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $17.62 | 1.94x | yes | EPS $1.63 / 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 | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Kentucky Regulated | operating | enterprise | $3.8b | — | withheld | unresolved no unit value |
| Pennsylvania Regulated | operating | enterprise | $3.1b | — | withheld | unresolved no unit value |
| Rhode Island Regulated | operating | enterprise | $2.2b | — | withheld | unresolved no unit value |
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
| Field | Value |
|---|---|
| Net debt | $19.0b |
| Net debt / NOPAT (after-tax) | 10.72x |
| Net debt / operating income (pre-tax) | 8.65x |
| Interest coverage | 2.6x |
| Share count CAGR (dilution) | 0.7% |
| Burning cash | no |
Bullet Takeaways
- PPL is a mature, multi-state regulated utility: Kentucky at about 42% of the business, Pennsylvania at 34%, and Rhode Island at 24%. Its earnings are set by regulators, so the right way to read it is rate base growth and allowed returns, not market-driven sales.
- The growth story is the data center wave. PPL reports an advanced-stage Pennsylvania data center pipeline of 28.3 gigawatts and a Kentucky pipeline near 13 gigawatts, underpinning a $23 billion capital plan and roughly 10.3% rate base growth through 2029.
Bull Case
PPL is a mature regulated utility, and that label sets how the numbers should be read. There is no organic sales growth to chase; the earnings are a function of how much capital the company can invest in its rate base and the return regulators allow on it. Through that lens PPL is in an unusually strong position, because it sits across three constructive jurisdictions, Kentucky, Pennsylvania, and Rhode Island, each with its own rate mechanisms. The filing shows the machinery at work: Kentucky's regulator "has authorized a return on equity of 9.35%" for approved environmental cost recovery projects (FY2025 10-K), and Rhode Island has a multi-year rate plan designed to collect roughly $181 million of additional revenue (FY2025 10-K). Those allowed returns are what convert capital spending into earnings.
The differentiator is the load growth, and it is exceptional for a utility. PPL reports an advanced-stage Pennsylvania data center pipeline of 28.3 gigawatts, up 12% in a quarter and nearly tenfold since early 2024, plus a Kentucky pipeline near 13 gigawatts driven by 13 new data center projects and investments from Toyota and Global Laser Enrichment. That demand justifies a $23 billion capital plan through 2029, supporting roughly 10.3% average annual rate base growth. More rate base at an adequate return is more earnings, mechanically, and the data center demand gives PPL a credible path to invest at scale.
The result is a clear financial trajectory. PPL beat in the first quarter of 2026 with ongoing EPS of $0.63, reaffirmed full-year guidance of $1.90 to $1.98, and targets 6% to 8% long-term EPS growth through 2029, with management signaling the top end of that range. The dividend yields about 3.2% with a 4% to 6% annual growth target. For a utility with this much funded, demand-backed growth, that is an attractive setup.
Bear Case
The variable with the most leverage on PPL is not demand, it is the cost of money, because this is a capital-structure story before it is a growth story. Net debt is roughly $19 billion against about $2.2 billion of operating income, putting leverage near 8.6 times, and interest coverage is only about 2.6 times. A $23 billion capital plan has to be financed, and a regulated utility funds it with a mix of debt and equity. In a higher-for-longer rate environment, the cost of that debt rises and the equity needed to keep the balance sheet healthy dilutes existing holders. The price does not obviously reflect how sensitive the plan is to financing costs; a utility this levered is effectively a bond proxy whose appeal fades when rates climb.
The regulatory dependence is the structural exposure. PPL does not set its own prices; three separate commissions do, and the entire growth case assumes each one allows recovery of the capital at an adequate return. The filing is candid that recovery runs through specific mechanisms and adjustment factors, with amounts "refunded to, or recovered from, customers through the adjustment factor" over time (FY2025 10-K). A single adverse rate case, a lower allowed return, or political pushback on data center cost allocation in any of the three states would slow the earnings conversion the bulls are counting on.
The execution and concentration risks round it out. The data center pipeline is impressive, but a pipeline is signed agreements, not delivered load; projects can be delayed, downsized, or cancelled, and the timing of when 20-plus gigawatts actually comes online is uncertain. The earnings-power and asset-based valuation methods read the price as expensive even though the relative-multiple frame supports it, a sign the price already capitalizes the growth plan rather than current cash. If financing costs stay high, a rate case disappoints, or the data center ramp slips, the price has little cushion below the relative-multiple support.
Valuation
The valuation families split in the pattern typical of a regulated utility mid-build. The relative-multiple frame supports the $35.38 price, placing fair value right at it, but the asset-based and earnings-power methods read it as expensive, while the growth-DCF methods help support it. The dividend-discount methods land both above and below, reflecting the uncertainty in the payout's growth path.
Inverting the price into the assumption it embeds, the market is paying about 19 times company-wide operating income, a multiple so low that the price sits below what even a 5% per year operating-profit decline would warrant. That is a bound, not a solved growth rate: the price is not demanding aggressive growth, it is pricing in stability, and it sits in the lower half of the peer multiple range. Against the company's own history the implied pace is within range.
The honest conclusion is that PPL looks reasonably priced on the implied-growth math, with the data center and rate base story offering upside if the capital plan funds at adequate returns, but full on the absolute asset and earnings methods because of the leverage. The dividend, near a 3.2% yield with a 4% to 6% growth target, anchors the return. The upside above that yield depends on the regulators and the financing environment cooperating with a very large capital program. This is a yield-plus-rate-base-growth utility, priced as one, with the leverage as the discount.
Catalysts
The dominant catalyst is the data center load pipeline converting into approved, funded investment. PPL reports an advanced-stage Pennsylvania data center pipeline of 28.3 gigawatts, up 12% in a quarter and nearly tenfold since early 2024, ramping from about 0.6 gigawatts online this year toward 20.7 gigawatts by 2030, plus a Kentucky pipeline near 13 gigawatts. The $23 billion capital plan through 2029, a $3 billion increase over the prior plan, and the targeted 10.3% rate base growth are the mechanisms that turn this demand into earnings. A Blackstone joint venture for Pennsylvania generation is additional potential upside not fully in the base plan.
On results and guidance, PPL beat in the first quarter of 2026 with ongoing EPS of $0.63 against a $0.62 estimate and revenue of $2.77 billion, reaffirmed full-year guidance of $1.90 to $1.98, and reiterated a 6% to 8% long-term EPS growth target through 2029, signaling the top end. The dividend was set at $0.28 per share for the quarter, a roughly 3.2% yield, with a 4% to 6% annual growth target.
The risks to watch are the financing of the large capital plan in a high-rate environment, the outcomes of rate cases across the three jurisdictions, and the timing and durability of the data center load. Analyst sentiment is constructive, leaning Buy with a median price target near $40, though some firms trimmed estimates after the first quarter. Execution in 2026 hinges on completing about $5.1 billion of infrastructure investment and advancing the Kentucky generation and Pennsylvania data center projects.
Sources:
- https://uk.investing.com/news/company-news/ppl-q1-2026-slides-data-center-boom-drives-28gw-pipeline-beats-estimates-93CH-4664121
- https://www.stocktitan.net/sec-filings/PPL/8-k-ppl-corp-reports-material-event-ef06cf9cb7a1.html
- https://www.utilitydive.com/news/ppl-data-center-pipeline-pjm-blackstone-earnings/819804/
- https://public.com/stocks/ppl/forecast-price-target
- https://www.benzinga.com/analyst-stock-ratings/price-target/26/05/52464291/ppl-analysts-cut-their-forecasts-after-q1-earnings
Peer Cohorts (Per Segment, With Filing Citations)
Kentucky Regulated / Pennsylvania Regulated / Rhode Island Regulated (reported)
- FE (FIRSTENERGY CORP)
- FY2025 10-K: …regulators with the authority to set binding rates that are cost-based and can be charged to and collected from customers. The Electric Companies and the Transmission Companies recognize, as regulatory assets and regulatory liabilities, costs that FERC and the various state utility commissions, as applicable, have…
- FY2025 10-K: …influence our operating environment. Changes in, or reinterpretations of, existing laws or regulations, or the imposition of new laws or regulations, by federal executive orders or otherwise, have in the past and could in the future require us to incur additional costs, which could be substantial, or change the way…
- EIX (EDISON INTERNATIONAL)
- FY2025 10-K: …a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a…
- FY2025 10-K: 8 million; • Property and other taxes of $11 million; • Other income of $4 million; • Income tax expense of $2 million; partially offset by decreases in: • Purchased power and fuel expense of $276 million; • Operation and maintenance expense of $28 million. • An increase in revenue of $91 million was primarily due to…
- ETR (ENTERGY CORP /DE/)
- FY2025 10-K: …Authority and The Bank of New York Mellon authorizing Revenue Refunding Bonds (Entergy Louisiana, LLC Project) Series 2021B (4(f) to Form 8-K filed April 1, 2021 in 1-32718). (d) 12 -- Mortgage and Deed of Trust of Entergy Louisiana, dated as of November 1, 2015, as amended by the following Supplemental Indentures:…
- FY2025 10-K: :EntergyLouisianaMember 2025-01-01 2025-12-31 0000065984 us-gaap:ElectricityUsRegulatedMember etr:OtherElectricMember etr:EntergyMississippiMember 2025-01-01 2025-12-31 0000065984 us-gaap:ElectricityUsRegulatedMember etr:OtherElectricMember etr:EntergyNewOrleansMember 2025-01-01 2025-12-31 0000065984…
- SO (SOUTHERN CO)
- FY2025 10-K: ROE of 9.85 %, and an equity ratio of 49.35 %. Interim rates became effective January 1, 2025, subject to refund, based on Virginia Natural Gas' original requested increase of approximately $ 63 million. Refunds to customers related to the difference between the approved rates implemented December 31, 2025 and the…
- FY2025 10-K: …effective July 1, 2022, under which Cooperative Energy will continue to decrease its use of Mississippi Power's generation services under the MRA tariff up to 2.5 % annually through 2035. At December 31, 2025, Mississippi Power is serving approximately 394 MWs of Cooperative Energy's annual demand. Beginning in 2036,…
- AEE (AMEREN CORP)
- FY2025 10-K: …results could differ from those estimates. Regulation Our customer rates are regulated by the MoPSC, the ICC, and the FERC. We defer certain costs as assets pursuant to actions of rate regulators or because of expectations that we will be able to recover such costs in future rates charged to customers. We also defer…
- FY2025 10-K: …customers decoupled from sales volumes through the VBA • Formula ratemaking • Initial rates based on future test year • Revenues decoupled from sales volumes Regulatory mechanisms • PISA Riders: • RESRAM • FAC • Rush Island securitization • MEEIA • PGA • WNAR Trackers: • Pension and postretirement benefit costs •…
- PCG (PG&E CORP)
- FY2025 10-K: …UNITS OF MEASUREMENT GLOSSARY FORWARD-LOOKING STATEMENTS PART I ITEM 1. BUSINESS Triple Bottom Line Regulatory Environment Environmental Regulation Ratemaking Mechanisms Human Capital Electric Utility Operations Natural Gas Utility Operations Competition Sustainability and Resiliency ITEM 1A. RISK FACTORS ITEM 1B.…
- FY2025 10-K: …other state and federal agencies responsible for implementing environmental laws. The Utility maintains a comprehensive compliance program but may be liable for remediation of hazardous substances even if it did not deposit those substances on the site. The Utility's remediation activities are overseen by the…
- EVRG (EVERGY, INC.)
- FY2025 10-K: …Kansas, is an integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity. Evergy Kansas Central serves approximately 751,000 customers located in central and eastern Kansas. Customers include approximately 651,100 residences, 94,800 commercial firms, and…
- FY2025 10-K: …and maintenance costs and other costs associated with Sibley Station following its retirement in November 2018. The amended final order in Evergy Missouri West's 2022 rate case required Evergy Missouri West to refund these revenues to customers over a four -year period. TFR refunds: These amounts are associated with…
- CMS (CMS ENERGY CORP)
- FY2025 10-K: …to the previous "project stage" model and clarify the threshold for when capitalization should begin, focusing on whether completion of the project is probable. The amendments are effective for annual and interim reporting periods beginning after December 15, 2027. The guidance may be applied on a prospective,…
- FY2025 10-K: 8-K filed November 22, 2021) 10.16.d 1-5611 10.1 - First Amendment to the Amended and Restated $250 million Secured Revolving Credit Agreement (Form 8-K filed November 29, 2022) 10.16.e 1-5611 10.1 - Amendment No. 2 to the Amended and Restated $250 million Secured Revolving Credit Agreement (Form 8-K filed November…
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.