Mizuho Remains Bullish On CMS Energy Amid Natural Gas Rate Case; Trims Price Target

Mizuho analyst Anthony Crowdell reiterated a Buy rating on CMS Energy Corporation CMS, lowering the price target to $68 from $69.
CMS Energy is likely to bear the brunt of the hurdles of increased regulatory scrutiny, which would harm the growth outlook in the future.
In view of CMS's natural gas rate case in Michigan, the analyst expects The Michigan Public Service Commission to use a 15-year average forecast for gas sales, consistent with how CMS filed its natural gas rate case, compared to the 5-year average used by the Attorney General, which was severely impacted by the pandemic.
The analyst notes that AG projects residential sales to decline 0.5% annually, while CMS projects sales to decline 2.6% year-over-year.
On the commercial side, the AG projects sales rising 0.2%, while CMS projects a decrease of 4.4%.
The analyst believes CMS is one of the high-quality names with a proven track record of consistently delivering within its long-term growth rate.
The analyst expects the MPSC to adopt CMS's sales forecast methodology.
Price Action: CMS shares are trading higher by 1.22% at $61.26 on the last check Wednesday.

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