Jefferies Research Report: WEC Energy Group (WEC) - Datacenter Demand & Nuclear PPA Review

Jefferies maintains a Hold rating on WEC Energy and lowers its price target to $120 (from $123) based on an FY29 SOTP roll-forward. While the Point Beach nuclear PPA recontracting removes anticipated replacement build capex, robust data center expansion and easing political/regulatory risks support a solid ~8% EPS CAGR through 2030.

Key Takeaways

• 1.Jefferies maintains a Hold rating on WEC Energy Group, adjusting its price target to $120 (from $123) after rolling forward its SOTP valuation to FY29.
• 2.The unexpected 20-year Point Beach nuclear PPA recontracting removes near-term generation replacement capex upside, though robust data center demand (MSFT, ORCL, potential third hyperscaler) may require future CCGT additions.
• 3.Political and regulatory overhangs have eased following David Crowley's moderate primary victory in the Wisconsin gubernatorial race and reasonable Staff testimony in ongoing rate cases.

Table of Contents

• Datacenters Keep Lights On as Nuke Replace Upside Muted: Plan Intact on Review
• TARGET | ESTIMATE CHANGE
• The Long View: WEC Energy
• What Do We Think Of Shares Here?
• Wisconsin rate cases considered lower-risk and noncontroversial with Staff testimony reasonable.
• Fine-tune FY27-28 estimates post 2Q results and maintain trajectory through FY30 ahead of Fall update, see top-end of 7-8% EPS guide through FY30.
• Company Description
• Company Valuation/Risks
• Analyst Certification
• Company Specific Disclosures
• Explanation of Jefferies Ratings
• Valuation Methodology
• Other Important Disclosure

Report data

Exhibit 2 - WEC Solidly At 7-8% EPS CAGR

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