Last Update22 Oct 25Fair value Increased 5.85%
The average analyst price target for IDACORP has increased by approximately $7.76. This reflects a more optimistic outlook driven by expectations of higher capital expenditures and a favorable cost of capital environment in the utilities sector.
Analyst Commentary
Recent analyst updates on IDACORP reflect a mix of optimistic and cautious sentiment regarding the company's growth prospects, capital strategy, and sector positioning. These perspectives shape both the current valuation outlook and future growth considerations for investors.
Bullish Takeaways- Bullish analysts highlight the recent increases in price targets as a response to positive signals from the utilities group, including expectations for higher capital expenditures and a downward trend in the overall cost of capital.
- Utilities, including IDACORP, have outperformed broader benchmarks recently. This has been driven by sector-wide updates that point to expanding investments and supportive industry conditions.
- Long-term industry tailwinds such as growing appreciation for nuclear energy, as well as ongoing gains in utility-scale renewable and residential solar projects, are seen as under-recognized positives in current market narratives.
- Positive data points from independent power producer (IPP) earnings and broader guidance trends support a constructive outlook on IDACORP's fundamentals and its potential for above-market returns.
- Some bearish analysts remain cautious, reflected in reduced price targets and a more neutral view of the stock’s immediate upside.
- The firm’s updated price targets are partly attributed to sector-wide adjustments, which indicates that improvements may be offset by overarching industry challenges or normalized expectations.
- Concerns persist around execution risks associated with large-scale project expansions, especially in diversified and regulated utilities that are facing higher scrutiny and changing regulatory environments.
- There is a recognition that while the broader sector has performed well, sustained outperformance may require clearer differentiation in growth and capital efficiency.
What's in the News
- IDACORP's Board of Directors has declared a common stock dividend of $0.88 per share, payable on December 1, 2025, to shareholders of record as of November 5, 2025. (Company announcement)
- IDACORP increased its full-year 2025 earnings guidance, with the lower end of its range raised to $5.70 to $5.85 per diluted share. (Company guidance)
Valuation Changes
- Fair Value has increased from $132.67 to $140.43, reflecting a modest upward revision in estimated intrinsic value.
- Discount Rate remains unchanged at 6.78%. This signals consistency in perceived risk and capital cost assumptions.
- Revenue Growth projection has decreased from 8.34% to 7.78%. This indicates a slightly slower anticipated pace of sales expansion.
- Net Profit Margin estimate has edged down from 19.19% to 18.70%, suggesting marginally lower expected earnings efficiency.
- Future P/E (Price-to-Earnings) ratio has risen from 20.47x to 22.59x. This points to higher expectations for forward-looking valuation multiples.
Key Takeaways
- Strong regional growth and electrification trends are fueling higher electricity demand, supporting recurring revenue and long-term business expansion.
- Planned infrastructure investments and regulatory support position IDACORP for enhanced earnings stability and potential upside from underestimated future load growth.
- Heavy dependence on weather-sensitive hydro, regulatory uncertainties, and rising infrastructure costs threaten earnings stability and may erode returns if risks materialize or are not mitigated.
Catalysts
About IDACORP- Engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States.
- Robust customer and population growth in IDACORP's service area, combined with significant new large-scale industrial investments (e.g., Micron fabs, data centers), suggests sustained above-average electricity demand well into the 2030s, supporting long-term revenue growth.
- Electrification trends, including increased deployment of EV fast-charging infrastructure and broader electrification of end uses, are driving incremental kWh sales and recurring revenue, with large unforecasted load growth potential from new projects not yet included in official load projections.
- Massive planned capital investments in transmission lines, energy storage, and generation assets-supported by a constructive regulatory environment and recent rate case filings-are set to expand IDACORP's rate base, enhancing regulated returns and long-term earnings growth.
- Ongoing national and regional focus on clean energy transition and grid modernization, including federally supported incentives, positions IDACORP to successfully grow its asset base, take advantage of tax credits, and enhance earnings stability and net margins through cost recovery.
- Conservative IRP forecasts and increasing inquiry volume for new large loads indicate load growth and capital needs may be underestimated, offering potential positive surprises to future revenue and earnings as more projects materialize and are reflected in future regulatory filings.
IDACORP Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming IDACORP's revenue will grow by 8.3% annually over the next 3 years.
- Analysts assume that profit margins will increase from 17.0% today to 19.2% in 3 years time.
- Analysts expect earnings to reach $441.8 million (and earnings per share of $7.29) by about September 2028, up from $306.9 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.5x on those 2028 earnings, down from 21.9x today. This future PE is greater than the current PE for the US Electric Utilities industry at 19.9x.
- Analysts expect the number of shares outstanding to grow by 1.43% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.
IDACORP Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- IDACORP's reliance on hydroelectric generation and sensitivity to weather patterns, such as low precipitation and drought, increase volatility in earnings and pose a risk to net margins if unfavorable climate trends persist or worsen.
- The company's ongoing and accelerating capital investment needs (especially in transmission, storage, and new gas-fired or renewable generation), driven by rapid load growth and new large customer projects, require significant financing; if regulators disallow cost recovery, or if increased debt and equity issuance dilute returns, future earnings and return on equity (ROE) may be pressured.
- Uncertainty around regulatory approval processes, including the outcomes of pending rate cases, the introduction of new depreciation and interest trackers, and the use of additional tax credits, creates potential risk to revenue and net income if regulatory lag persists or if lower allowed ROEs or unfavorable terms are set.
- Delays, permitting challenges, or unfavorable economic impacts (such as tariffs or executive orders impacting projects like Jackalope Wind) could force a shift in planned resource mix, leading to increased reliance on gas or alternative resources; this could result in higher O&M expenses, capital costs, or stranded assets, negatively affecting margins and future profitability.
- Growing exposure to labor cost increases, wildfire mitigation, and insurance expenses, driven by the need to maintain and harden infrastructure against extreme weather and operational risks, may erode net margins and reduce the potential for future earnings growth.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $132.667 for IDACORP based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.3 billion, earnings will come to $441.8 million, and it would be trading on a PE ratio of 20.5x, assuming you use a discount rate of 6.8%.
- Given the current share price of $124.52, the analyst price target of $132.67 is 6.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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