Liam Denning, Columnist

Utilities Are Priced for Pandemic, Er, Perfection

Coronavirus fear has given the sector a tech-like valuation.

February 27, 2020 at 1:30 PM UTC

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Lofty.
Photographer: Justin Sullivan/Getty Images North America

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Utilities are more Tennessee Valley than Silicon Valley, but they’re having a distinctly tech-like moment. At more than 20 times forward earnings, they sport an average multiple on a par with tech stocks.

Have the poles-and-wires guys somehow morphed into digital growth machines? Not so much. Utility earnings are expected to rise by just more than 4% in each of the next two years, well below what’s estimated for technology stocks (and the broader market). Same goes for trailing earnings growth.