Bank of America reaffirms utilities sector growth outlook

Investing.com -- Bank of America released its mid-quarter review of the U.S. power and utilities sector for the second quarter of 2026, reporting that 12 of 14 covered companies exceeded the bank's earnings estimates.

Eight companies beat consensus expectations, four reported results in line with forecasts, and two missed estimates. The results were supported by rate relief, customer and load growth, and construction-related earnings, which offset higher interest, depreciation, dilution and operating costs.

Annual guidance was reaffirmed across most companies, with some firms providing upward revisions. AEP raised its 2026 range by $0.10 despite missing quarterly estimates, while IDA increased its guidance floor by $0.05. CMS introduced 2027 guidance without rebasing growth through its NorthStar restructuring, and XEL raised its expected average growth through 2030 to above 9%. EIX lowered GAAP guidance for non-core charges but maintained core guidance and its capital outlook.

Data-center demand continued to drive growth across the sector. AEP's contracted load reached 69 gigawatts, while FE's contracted and pipeline demand rose 30% to 24.8 gigawatts. XEL retained a pipeline of more than 20 gigawatts, and NEE increased FPL's large-load forecast to 8 gigawatts. CNP, DTE, WEC, CMS, OGE and IDA also advanced contracted projects or customer negotiations.

EXC's pipeline reset and NWE's cautious commentary highlighted the importance of collateral, tariff protection, signed agreements and realistic energization schedules.

Regulatory execution was generally constructive, with utilities increasingly linking growth plans with affordability measures. Companies are implementing large-load tariffs, customer collateral requirements, minimum-demand provisions and termination protections to shield existing customers from infrastructure and stranded-asset risk.

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