Beat-Up Power Generators Turn Best Buys in Wall Street's Eyes
- Profits, share performance seen topping all business sectors
- Natural gas recovery is key to merchant generators recovery
Emissions rise from stacks at the Duke Energy Corp. Gibson Station power plant in Owensville, Indiana, U.S., on Thursday, July 23, 2015. Coal reclaimed its ranking as the top fuel for generating electricity at U.S. power plants in May, beating natural gas, which took the number one spot for the first time in April.
Photographer: Luke Sharett/BloombergCheap natural gas, tougher regulations, a surge in renewable power and tepid demand growth all conspired to make 2015 a bleak year for independent power producers. Wall Street expects a lot better in 2016.
The group will outperform every sector in the S&P 500 next year after plunging 48 percent in 2015, according to analysts’ estimates compiled by Bloomberg and an index of producers that is set to rise 63 percent. Bears who see flat demand and stiffer competition from new gas-fired power plants aren’t so sure.