Dominion Energy
D
$66.80
-2.15%
Dominion Energy is a major integrated energy company headquartered in Richmond, Virginia, providing electricity and natural gas to millions of customers across the U.S., with over 31 GW of generation capacity and 91,000 miles of transmission lines. As a regulated electric utility, it operates primarily in the Mid-Atlantic and Southeast, with a significant focus on its Virginia franchise, which accounts for the majority of its revenue. The company is currently at the center of a transformative narrative: it is being acquired by NextEra Energy in a $67 billion deal announced in June 2026, a move that has reshaped investor sentiment and positioned Dominion as a key beneficiary of the AI-driven surge in electricity demand. The acquisition, expected to close in the coming months, has driven the stock to near its 52-week high, while the company continues to invest heavily in offshore wind and grid modernization.…
D
Dominion Energy
$66.80
Related headlines
Investment Opinion: Should I buy D Today?
Rating: Hold. The stock is a solid but not compelling buy at current levels, given the merger premium and limited upside to the average target. The thesis is that the NextEra acquisition will create a dominant utility with AI-driven growth, but execution risks and high leverage warrant caution.
Sign up to view all
D 12-Month Price Forecast
The AI-driven electricity demand surge is a powerful tailwind for Dominion, and the merger with NextEra enhances its growth prospects. The low PEG and strong revenue growth support a bullish stance, but the high debt and negative FCF temper confidence. If the merger closes and growth continues, the stock could outperform; however, any regulatory or integration setback would warrant a downgrade to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Dominion Energy's 12-month outlook, with a consensus price target around $71.00 and implied upside of +6.3% versus the current price.
Average Target
$71.00
0 analysts
Implied Upside
+6.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$67 - $79
Analyst target range
The target price range spans from a low of $67.00 to a high of $79.00, representing a 15.2% spread between the low and high, which indicates moderate uncertainty about the stock's future performance. The high target of $79.00 implies a 14.2% upside, likely assuming successful completion of the NextEra merger and continued growth in AI-driven electricity demand, which could lead to multiple expansion. The low target of $67.00 suggests a 3.1% downside, possibly pricing in risks such as regulatory hurdles, integration challenges, or a slowdown in demand growth. The wide range reflects the market's uncertainty around the merger's closing and the long-term benefits, but the consensus 'Hold' rating suggests that analysts are waiting for more clarity before taking a more definitive stance.
Bulls vs Bears: D Investment Factors
Dominion Energy presents a mixed picture: strong revenue growth and a transformative merger offer upside, but high debt, negative FCF, and execution risks temper enthusiasm. The bull case is supported by the AI-driven demand surge and low PEG, while the bear case hinges on leverage and merger uncertainties. Currently, the bull side has slightly stronger evidence given the robust growth and strategic positioning, but the key tension is whether the merger closes successfully and delivers synergies without regulatory setbacks. If the deal proceeds smoothly, the stock could re-rate higher; if not, it may stagnate near current levels.
Bullish
- Strong Revenue Growth: Q1 2026 revenue surged 26.2% YoY to $5.14B, driven by robust demand and rate base growth, well above the utility sector average. This acceleration indicates strong organic momentum and benefits from AI-driven electricity demand.
- Attractive Valuation with Low PEG: With a PEG ratio of 0.41, the stock is undervalued relative to its expected earnings growth. The trailing PE of 16.93x is reasonable for a utility, and the low PEG suggests potential for upside as growth continues.
- Merger with NextEra Energy: The $67B acquisition by NextEra Energy, expected to close soon, provides a clear catalyst. The deal is likely to enhance scale and growth prospects, with the high analyst target of $79 implying 14.2% upside from current levels.
- AI-Driven Demand Tailwind: Dominion is well-positioned to benefit from the AI-driven surge in electricity demand, with record utility spending of $240B in 2026. Its Virginia franchise and offshore wind investments align with this growth trend.
Bearish
- High Debt Levels: Debt-to-equity ratio is 1.68, indicating significant leverage. Interest expenses were $553M in Q1 2026, which could pressure earnings if rates rise or cash flows weaken.
- Negative Free Cash Flow: TTM free cash flow is -$7.39B, reflecting heavy capital expenditures for offshore wind and grid modernization. This cash burn may require additional debt or equity issuance, diluting shareholders.
- Merger Execution Risks: The NextEra acquisition may face regulatory hurdles or integration challenges. The low analyst target of $67 implies a 3.1% downside, reflecting uncertainty about deal completion and synergies.
- Limited Upside to Average Target: The average analyst target of $71 is only 2.6% above the current price of $69.17, suggesting limited near-term upside. The consensus 'Hold' rating indicates analysts see balanced risk/reward.
D Technical Analysis
Dominion Energy's stock has been in a strong uptrend over the past year, with a 1-year price change of +18.34%, significantly outperforming the S&P 500's +18.19% over the same period. The current price of $69.17 sits at 94.8% of its 52-week range (between $55.85 and $72.99), indicating the stock is trading near its highs, which reflects robust momentum and investor optimism, though it also suggests the stock may be overextended in the short term. The 52-week low of $55.85 was set in late 2025, and the stock has since rallied, supported by the acquisition news and strong sector tailwinds.
Beta
0.63
0.63x market volatility
Max Drawdown
-10.7%
Largest decline past year
52-Week Range
$56-$73
Price range past year
Annual Return
+9.6%
Cumulative gain past year
| Period | D Return | S&P 500 |
|---|---|---|
| 1m | -4.3% | +2.8% |
| 3m | +7.9% | +4.2% |
| 6m | +7.2% | +11.3% |
| 1y | +9.6% | +21.5% |
| ytd | +12.8% | +12.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
D Fundamental Analysis
Dominion Energy reported revenue of $5.144 billion in Q1 2026, a 26.2% increase year-over-year, driven by strong demand and rate base growth. This marks a significant acceleration from the prior year's quarterly revenues, which ranged from $3.4 billion to $4.5 billion, indicating a robust growth trajectory. The company's revenue segments show that Dominion Energy Virginia is the primary driver, contributing $3.768 billion, followed by South Carolina at $992 million and Contracted Energy at $386 million, highlighting the regulated utility's reliance on its core Virginia operations. The 26.2% YoY growth is well above the utility sector average, reflecting both organic growth and the impact of the pending merger.
Quarterly Revenue
$5.1B
2026-03
Revenue YoY Growth
+26.2%
YoY Comparison
Gross Margin
51.6%
Latest Quarter
Free Cash Flow
$-7.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is D Overvalued?
Given Dominion's positive net income of $621 million in Q1 2026, the PE ratio is the most appropriate valuation metric. The trailing PE stands at 16.93x, while the forward PE is 18.13x, indicating that the market expects earnings to grow modestly in the coming year, as the forward multiple is slightly higher. This gap suggests that while earnings are expected to increase, the stock price has already risen to reflect this optimism, leaving limited room for multiple expansion. The PEG ratio of 0.41x is notably low, implying that the stock is undervalued relative to its expected earnings growth, which is a positive signal for value investors.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 12x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are prominent: Dominion carries a debt-to-equity ratio of 1.68, and interest expenses of $553M in Q1 2026 consume a significant portion of operating income. The company's TTM free cash flow is deeply negative at -$7.39B, reflecting massive capital outlays for offshore wind and grid upgrades. This cash burn could force additional debt issuance or equity dilution, pressuring EPS and dividend sustainability. The payout ratio of 76% leaves little room for error, and any earnings shortfall could threaten the dividend, which is a key investor attraction.
FAQ
The key risks include: 1) High debt levels (debt-to-equity of 1.68) and negative free cash flow (-$7.39B TTM), which could lead to financial strain. 2) Merger execution risks, including regulatory hurdles and integration challenges, which could derail the deal. 3) Macro risks, such as rising interest rates, which could increase borrowing costs and compress utility valuations. 4) Company-specific risks, such as the high payout ratio of 76%, which could threaten the dividend if earnings decline. The most severe risk is a failed merger, which could send the stock down to the 52-week low.
The 12-month forecast is moderately bullish, with a base case probability of 50% targeting $69-73, a bull case probability of 30% targeting $75-79, and a bear case probability of 20% targeting $60-67. The most likely scenario is the base case, where the merger closes and the stock trades near the average analyst target of $71. The key assumption is successful merger completion and continued AI-driven demand growth. If the merger fails, the stock could fall to the low target of $67 or lower.
Dominion's trailing PE of 16.93x is slightly above the utility sector average of around 15x, suggesting a modest premium. However, the PEG ratio of 0.41 indicates the stock is undervalued relative to its expected earnings growth, which is a positive signal. The forward PE of 18.13x implies the market expects earnings growth, but the stock price has already risen to reflect this optimism. Overall, the valuation is fair to slightly undervalued, with the low PEG suggesting potential upside if growth materializes.
Dominion Energy is a reasonable buy for investors with a medium-term horizon, given the 14.2% upside to the high analyst target and the 4.55% dividend yield. However, the average target implies only 2.6% upside, and the stock trades near its 52-week high, so near-term gains may be limited. The biggest downside risk is a failed merger or regulatory issues, which could push the stock down to the 52-week low of $55.85, a -19.3% loss. For those willing to accept this risk, the stock offers a good risk/reward, especially if the merger closes successfully.
Dominion is best suited for long-term investment, given its regulated utility model, dividend yield of 4.55%, and growth prospects from AI demand. The stock's beta of 0.636 indicates lower volatility than the market, making it a stable holding. The merger with NextEra could provide a catalyst over the next 12 months, but the full benefits will take years to materialize. A minimum holding period of 3-5 years is recommended to ride out merger integration and capture the growth from AI-driven electricity demand. Short-term trading is possible, but the stock's limited upside to the average target makes it less attractive for quick gains.