SKN | Morgan Stanley Maintains Equal Weight on Duke Energy as Price Target Rises

Key Takeaways

• Morgan Stanley raised its price target on Duke Energy Corporation to $139 from $130.

• Equal Weight rating maintained despite upward revision.

• BMO Capital separately raised its target to $136 with an Outperform rating.

• Duke reported record nuclear reliability and $600 million in federal production tax credits.

Target Lifted, Rating Unchanged

Morgan Stanley increased its price objective on Duke Energy to $139 while retaining an Equal Weight stance. The adjustment reflects updated valuation assumptions across North American regulated utilities and independent power producers. Utilities underperformed the broader S&P 500 in January, prompting analysts to revisit relative pricing within the sector.

However, maintaining an Equal Weight rating suggests Morgan Stanley views risk-reward as balanced at current levels rather than compellingly undervalued.

Sector Debate: Data Centers vs Affordability

In its fourth-quarter preview, Morgan Stanley highlighted a developing debate around data center-driven power demand growth.

While utilities may benefit from rising electricity consumption tied to AI infrastructure and hyperscale data centers, affordability pressures and political scrutiny around rate increases remain important counterweights.

This tension between growth visibility and regulatory oversight continues to shape valuation frameworks in the sector.

BMO More Constructive

BMO Capital Markets raised its target to $136 and maintained an Outperform rating following a modest operational earnings beat.

Management reaffirmed a 5%–7% EPS growth trajectory through 2030, targeting the upper half of that range starting in 2028. This forward visibility is particularly relevant for income-focused investors evaluating long-duration regulated assets.

Nuclear Fleet Reliability Record

Duke Energy announced that its nuclear fleet achieved a systemwide reliability record in 2025, operating at 96.9% capacity.

The fleet generated approximately $600 million in federal nuclear production tax credits for customers. With 11 nuclear units across six sites in the Carolinas, nuclear remains Duke’s primary generation source in the region, serving nearly 8 million homes.

High reliability supports earnings stability, regulatory credibility, and long-term capital planning.

Outlook

Duke Energy continues to position itself as a stable, regulated utility with steady EPS growth targets and strong nuclear asset performance.

The divergence between Morgan Stanley’s balanced view and BMO’s more constructive stance reflects broader debates in the utility sector around valuation, political oversight, and infrastructure-driven demand growth.

Investors will likely focus on capital expenditure plans, regulatory rate cases, and demand trends tied to electrification and AI-driven data centers.

For confidential discussions regarding regulated utility valuation models, nuclear asset productivity analysis, and income-focused portfolio positioning within North American energy infrastructure, our senior advisory team is available for discreet consultation tailored to institutional and cross-border mandates.