Evergy
EVRG
$80.96
+0.55%
Evergy, Inc. is a regulated electric utility that generates, transmits, and distributes electricity to customers across eastern Kansas and western Missouri through its operating subsidiaries, including Evergy Metro, Evergy Kansas Central, Evergy Missouri West, and Evergy Transmission. With a combined rate base exceeding $20 billion and a position as one of the largest wind energy suppliers in the United States, Evergy is a rate-regulated, capital-intensive utility whose earnings are driven primarily by allowed returns on invested capital rather than merchant power pricing. The current investor narrative centers on the company's substantial capital expenditure program — visible in quarterly capex of roughly $850 million to $960 million — which is pressuring free cash flow but should support rate base growth and future earnings if regulators approve timely rate recovery. At the same time, the stock has underperformed the broader market over the past year, with relative strength versus SPY at -10.4% over 12 months, reflecting investor concerns about negative free cash flow, elevated payout ratios, and the interest-rate sensitivity typical of regulated utilities.…
EVRG
Evergy
$80.96
Investment Opinion: Should I buy EVRG Today?
The synthesized recommendation is a Hold, with a bias toward accumulating on weakness for income-oriented investors. The core thesis is that Evergy offers a defensive, regulated utility profile with a 3.67% dividend yield and a discounted forward PE of 17.77x, but negative free cash flow of -$1.41 billion and a high payout ratio of 71.66% limit near-term upside. The analyst consensus rating of Buy (mean 1.92) and average target price of $91.18 imply 12.6% upside, but the low target of $80.00 suggests limited downside protection if fundamentals weaken.
Supporting evidence includes a forward PE of 17.77x versus the sector average of 18-20x, a price-to-book of 1.63x below the historical 1.8-2.0x range, and a dividend yield of 3.67% that is above the stock's historical average. Revenue grew 5.13% year-over-year in Q2 2026 to $1.50 billion, and net income has increased year-over-year for four consecutive quarters. However, ROE of 8.37% is below the 10-12% typical for regulated utilities, and free cash flow remains deeply negative. The EV/EBITDA of 12.0x is reasonable but not compelling relative to peers.
The biggest risks that could invalidate the thesis are a dividend cut due to unsustainable payout, regulatory rate case denials that limit rate base growth, and rising interest rates that compress utility valuations. The rating would upgrade to Buy if free cash flow inflects positive or if ROE approaches 10%, and would downgrade to Sell if the dividend is cut or if revenue growth decelerates below 3%. Relative to its own history, the stock is fairly valued, with a PE of 19.54x near the lower end of its recent 19-49x range and a price-to-book of 1.63x close to its multi-year average of 1.5-1.7x. The stock appears fairly valued, with a modest discount to peers that is justified by below-average ROE and negative FCF.
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EVRG 12-Month Price Forecast
Evergy presents a balanced risk-reward profile with a defensive utility business, a discounted valuation, and a consensus Buy rating, but significant headwinds from negative free cash flow and a high payout ratio. The stock is likely to trade in a range of $85-95 over the next 12 months, with the base case (55% probability) assuming steady execution and no major regulatory surprises. The bull case (25%) hinges on successful capex execution and ROE improvement, while the bear case (20%) risks a dividend cut or regulatory setbacks. I would upgrade to bullish if free cash flow turns positive or if ROE approaches 10%, and downgrade to bearish if the dividend is cut or if revenue growth decelerates below 3%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Evergy's 12-month outlook, with a consensus price target around $91.18 and implied upside of +12.6% versus the current price.
Average Target
$91.18
0 analysts
Implied Upside
+12.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$80 - $103
Analyst target range
Evergy is covered by 11 analysts, and the consensus recommendation is a Buy with a recommendation mean of 1.92 (where 1.0 is a Strong Buy and 3.0 is a Hold). The average price target is $91.18, which implies approximately 12.6% upside from the current price of $80.96. The consensus leans moderately bullish, supported by recent institutional ratings that show mostly Buy/Outperform/Overweight actions from Citigroup, BMO Capital, and Barclays, with only UBS and Wells Fargo maintaining Neutral/Equal Weight stances.
The target range spans from a low of $80.00 to a high of $103.00, a spread of $23.00 or roughly 28% of the current price, which signals meaningful disagreement about the company's trajectory. The high target of $103.00 likely assumes successful execution on the capital expenditure program, constructive rate case outcomes that expand ROE toward 10%, and multiple expansion as free cash flow inflects positive. The low target of $80.00 — essentially at the current price — prices in continued margin pressure, regulatory friction, and the drag from negative free cash flow and high payout ratio. Notably, the low target being at the current price suggests that even the most bearish analyst sees limited downside, while the wide gap to the high target reflects uncertainty around the pace of rate base growth and the company's ability to fund its capex program without dilutive equity issuance. The recent ratings actions show no downgrades, with UBS's move from Buy to Neutral in February 2026 being the only notable negative shift, while Citigroup, BMO, and Barclays have reaffirmed bullish ratings as recently as July 2026.
Bulls vs Bears: EVRG Investment Factors
The bear case currently has stronger evidence due to the company's negative free cash flow of -$1.41 billion, elevated payout ratio of 71.66%, and persistent underperformance versus the market. However, the bull case is supported by a discounted forward PE of 17.77x, a consensus Buy rating with 12.6% upside to the average target, and a defensive low-beta profile. The most important tension is whether the massive capex program will eventually inflect free cash flow positive and drive ROE toward 10%, or whether continued negative FCF and high payout will force a dividend cut or equity issuance. Resolution of this tension will likely determine whether the stock re-rates toward the $103 high target or drifts toward the $80 low target.
Bullish
- Analyst consensus Buy with 12.6% upside: 11 analysts rate EVRG a Buy with a mean recommendation of 1.92, and the average price target of $91.18 implies 12.6% upside from the current $80.96. The low target of $80.00 sits essentially at the current price, suggesting even the most bearish analyst sees limited downside.
- Forward PE discount to utility sector: EVRG trades at a forward PE of 17.77x versus a typical regulated electric utility sector average of 18-20x, and its price-to-book of 1.63x is below the sector's historical 1.8-2.0x range. This discount provides valuation support if earnings meet the $5.97 consensus EPS estimate.
- Defensive low-beta profile: With a beta of 0.482, EVRG is roughly 52% less volatile than the market, offering portfolio stability during risk-off periods. The 3.67% dividend yield further cushions total return in flat or declining markets.
- Consistent YoY net income growth: Net income has grown year-over-year in each of the last four quarters: Q2 2026 $215M vs. Q2 2025 $171M, and Q1 2026 $152M vs. Q1 2025 $125M. This steady earnings progression supports the forward EPS estimate of $5.97.
Bearish
- Negative free cash flow of -$1.41B TTM: Trailing twelve-month free cash flow is -$1.41 billion, with Q2 2026 FCF of -$611 million as capex of $960 million far exceeded operating cash flow of $349 million. The company is funding dividends and growth partly through debt issuance, with net cash from financing at +$517 million in Q2 2026.
- Elevated payout ratio of 71.66%: The dividend payout ratio of 71.66% leaves limited cushion, especially with negative free cash flow. While the 3.67% yield is attractive, its sustainability depends on continued access to capital markets and constructive regulatory outcomes.
- Underperformance versus SPY across all windows: Relative strength versus SPY is negative across every period: -2.44% over 1 month, -8.67% over 3 months, -17.72% over 6 months, and -10.43% over 1 year. This persistent underperformance suggests capital rotation out of the utility and into the broader market.
- Below-average ROE of 8.37%: ROE of 8.37% is below the 10-12% range investors often expect from regulated utilities, reflecting the drag from a high debt-to-equity ratio of 1.51 and a thin current ratio of 0.49. This limits the company's ability to generate organic equity growth.
EVRG Technical Analysis
EVRG is in a range-bound consolidation with a modest upward bias, having gained 5.57% over the past year while trading at approximately 80.96, which places it at about 55.6% of its 52-week range of 71.41 to 88.62. That mid-range positioning signals neither momentum-driven overextension nor deep-value distress; instead, the stock has spent the past six months oscillating between the high 70s and high 80s, with a max drawdown of -11.88% from its peak. The 52-week high of 88.62 was set in early July 2026, and the stock has since failed to reclaim that level, suggesting overhead supply remains intact.
Short-term momentum has deteriorated meaningfully: the 1-month change is -0.32% and the 3-month change is -5.54%, both diverging negatively from the positive 1-year return of 5.57%. This divergence — a rising long-term trend with a falling intermediate trend — typically signals either a healthy mean-reversion pullback within an uptrend or the early stages of a trend reversal, and the fact that the 6-month change is also negative at -3.13% tilts the evidence toward the latter. Relative strength versus SPY is negative across every window (-2.44% over 1 month, -8.67% over 3 months, -17.72% over 6 months), confirming that capital has been rotating out of this utility and into the broader market, which gained 14.59% over six months. The recent bounce from the late-September low of 77.66 to 80.96 is encouraging but has occurred on relatively light volume of roughly 1.48 million shares, suggesting limited conviction behind the move.
Key technical support sits at the 52-week low of 71.41, with a secondary support zone around the September swing low of 77.66; resistance is defined by the 52-week high of 88.62 and the July breakdown level near 87. A decisive breakout above 88.62 would signal a new leg higher and likely attract momentum buyers, while a breakdown below 77.66 would open the door to a retest of the 71.41 low. The stock's beta of 0.482 is a critical risk-management input: EVRG is roughly 52% less volatile than the market, meaning it offers defensive characteristics and lower position-sizing risk, but also that it will likely lag in strong risk-on rallies — consistent with its -10.43% relative strength over the past year.
Beta
0.48
0.48x market volatility
Max Drawdown
-11.9%
Largest decline past year
52-Week Range
$71-$89
Price range past year
Annual Return
+5.6%
Cumulative gain past year
| Period | EVRG Return | S&P 500 |
|---|---|---|
| 1m | -0.3% | +1.9% |
| 3m | -5.5% | +3.9% |
| 6m | -3.1% | +12.1% |
| 1y | +5.6% | +19.2% |
| ytd | +10.8% | +14.2% |
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EVRG Fundamental Analysis
Evergy's revenue trajectory is modestly growing but decelerating on a sequential basis: Q2 2026 revenue of $1.50 billion grew 5.13% year-over-year versus Q2 2025's $1.43 billion, yet this was down from Q1 2026's $1.44 billion and well below the seasonally strong Q3 2025 print of $1.80 billion. The sequential pattern reflects the seasonal nature of utility demand, with summer cooling loads driving Q3 peaks, but the year-over-year growth of just over 5% is respectable for a regulated utility and is supported by rate base expansion and favorable weather. The single reported segment, Electric Utility, generated $7.58 billion in annual revenue, underscoring that Evergy is a pure-play regulated electric utility with no material diversification to offset regulatory or weather risk.
Profitability is solid but shows margin volatility tied to seasonal and one-time items: Q2 2026 net income was $215 million on a 14.33% net margin, with gross margin of 25.37% and operating margin of 25.19%, while the trailing gross margin stands at 32.28% and net margin at 14.45%. The Q1 2026 quarter reported an unusually high gross margin of 67.47% due to cost-of-revenue classification differences, but the more comparable Q2 2026 gross margin of 25.37% was actually below Q2 2025's 30.70%, indicating some cost pressure. Net income has grown year-over-year in each of the last four quarters (Q2 2026: $215M vs. Q2 2025: $171M; Q1 2026: $152M vs. Q1 2025: $125M), which is a positive trend, though the Q3 2025 quarter's $475 million profit remains the seasonal high-water mark.
The balance sheet carries meaningful leverage typical of a capital-intensive utility: debt-to-equity is 1.51, the current ratio is a thin 0.49, and ROE is 8.37% — below the 10-12% range investors often expect from regulated utilities. Most concerning is the cash flow profile: trailing twelve-month free cash flow is -$1.41 billion, with Q2 2026 free cash flow of -$611 million and capital expenditures of $960 million far exceeding operating cash flow of $349 million. The company is funding its growth capex and its $158 million quarterly dividend partly through debt issuance (net cash from financing was +$517 million in Q2 2026), and the payout ratio of 71.66% leaves limited cushion. With a dividend yield of 3.67% and negative FCF, Evergy's financial flexibility depends on continued access to capital markets and constructive regulatory outcomes.
Quarterly Revenue
$1.5B
2026-06
Revenue YoY Growth
+5.1%
YoY Comparison
Gross Margin
25.4%
Latest Quarter
Free Cash Flow
$-1.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is EVRG Overvalued?
Because Evergy is profitable — Q2 2026 net income of $215 million and trailing EPS of $0.05 on a GAAP basis, though the forward EPS estimate is $5.97 — the appropriate primary metric is the price-to-earnings ratio. The trailing PE is 19.54x while the forward PE is 17.77x, and the gap between them implies the market expects meaningful earnings growth (roughly 10%) over the next year, consistent with the consensus EPS estimate of $5.97 versus the depressed trailing figure. The forward PE of 17.77x is the more relevant anchor given the utility's stable, rate-base-driven earnings stream.
Relative to the broader utilities sector, Evergy trades at a modest discount: its forward PE of 17.77x compares to a typical regulated electric utility sector average in the 18-20x range, and its price-to-book of 1.63x is below the sector's historical average of roughly 1.8-2.0x. The price-to-sales ratio of 2.82x and EV/EBITDA of 12.0x are also reasonable for a regulated utility with a $20 billion-plus rate base. The discount appears justified by Evergy's below-average ROE of 8.37%, its negative free cash flow, and its higher-than-average payout ratio of 71.66%, which collectively suggest less financial flexibility than premium-rated peers.
Historically, Evergy's PE ratio has ranged widely from 7.7x to 53.4x over the past several years, but the recent quarterly readings have clustered between 19x and 49x, with the current 19.54x sitting near the lower end of that recent band. The price-to-book ratio of 1.63x is close to its multi-year average of roughly 1.5-1.7x, indicating the stock is neither cheap nor expensive relative to its own history. The dividend yield of 3.67% is above the stock's historical average yield of roughly 0.8-1.2% seen in 2024-2025, which may reflect the price decline rather than a dividend increase, and could signal value if the payout is sustainable — though the 71.66% payout ratio and negative FCF warrant caution.
PE
19.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 8x~53x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.0x
Enterprise Value Multiple
Investment Risk Disclosure
Evergy faces significant financial and operational risks stemming from its capital-intensive business model. The company's trailing twelve-month free cash flow is -$1.41 billion, with Q2 2026 free cash flow of -$611 million as capital expenditures of $960 million dwarfed operating cash flow of $349 million. This cash burn is funded partly through debt, with a debt-to-equity ratio of 1.51 and a current ratio of just 0.49, indicating limited short-term liquidity. The payout ratio of 71.66% leaves little margin for error, and any regulatory disallowance or unexpected cost overrun could pressure the dividend. Additionally, revenue is concentrated in a single Electric Utility segment generating $7.58 billion annually, with no diversification to offset weather or regulatory risk.
Market and competitive risks include valuation compression if interest rates rise, given the stock's utility sector sensitivity. The forward PE of 17.77x is a modest discount to the sector's 18-20x range, but this discount could widen if ROE remains below 10% or if free cash flow fails to improve. The stock's beta of 0.482 means it will likely lag in strong bull markets, as evidenced by its -10.43% relative strength versus SPY over the past year. Competitive disruption from renewable energy adoption and potential regulatory changes in Kansas and Missouri could alter the company's rate base growth trajectory. Recent analyst actions show UBS downgraded to Neutral in February 2026, while Citigroup, BMO, and Barclays reaffirmed bullish ratings as recently as July 2026, indicating mixed sentiment.
The worst-case scenario would involve a combination of regulatory rate case denials, continued negative free cash flow forcing a dividend cut, and rising interest rates compressing utility valuations. In this scenario, the stock could retest its 52-week low of $71.41, representing a decline of approximately 11.8% from the current price of $80.96. The analyst low target of $80.00 is essentially at the current price, but a more severe outcome could see the stock fall to the 52-week low or below if the dividend is cut. Historically, the stock has experienced a max drawdown of -11.88% from its peak, and a similar or larger drawdown is plausible if fundamentals deteriorate. Investors could lose 12-15% from current levels in a bear case, with the downside potentially extending to $71.41 or lower if negative FCF persists and the payout ratio becomes unsustainable.
FAQ
The most severe risk is financial: negative free cash flow of -$1.41 billion and a payout ratio of 71.66% could force a dividend cut or equity issuance if operating cash flow does not improve. Second, regulatory risk is significant, as adverse rate case outcomes in Kansas or Missouri could limit rate base growth and pressure ROE below its current 8.37%. Third, market risk includes interest rate sensitivity; rising rates could compress utility valuations and push the stock toward its 52-week low of $71.41. Fourth, competitive and operational risks include weather variability affecting demand and the capital-intensive nature of the business, with debt-to-equity at 1.51 and a current ratio of 0.49 indicating limited liquidity. These risks are ranked from most to least severe, with the dividend sustainability being the primary concern.
The 12-month forecast for EVRG includes three scenarios: a bull case with 25% probability targeting $95-$103, a base case with 55% probability targeting $85-$95, and a bear case with 20% probability targeting $71-$80. The base case is most likely, assuming steady revenue growth of 4-5%, stable margins, and no major regulatory setbacks, leading the stock toward the analyst average target of $91.18. The bull case requires successful capex execution and ROE improvement toward 10%, while the bear case involves a dividend cut or adverse regulatory rulings. The key assumption behind the base case is that free cash flow will gradually improve as capex peaks, and the dividend will be maintained. The current price of $80.96 is near the low end of the base case range, suggesting modest upside potential.
EVRG appears fairly valued to slightly undervalued relative to its peers and history. Its forward PE of 17.77x is below the regulated utility sector average of 18-20x, and its price-to-book of 1.63x is below the historical 1.8-2.0x range. However, this discount is justified by its below-average ROE of 8.37% and negative free cash flow of -$1.41 billion. The trailing PE of 19.54x is near the lower end of its recent 19-49x range, and the price-to-book is close to its multi-year average of 1.5-1.7x. The dividend yield of 3.67% is above its historical average, which may signal value if the payout is sustainable. The market appears to be pricing in modest earnings growth of about 10% to reach the $5.97 consensus EPS, but not a significant re-rating.
EVRG may be a good buy for income-oriented investors seeking a defensive utility with a 3.67% dividend yield and a discounted forward PE of 17.77x, but it carries significant risks. The analyst consensus is Buy with a $91.18 average target, implying 12.6% upside, yet the low target of $80.00 suggests limited downside protection. The biggest downside risk is the negative free cash flow of -$1.41 billion and a payout ratio of 71.66%, which could pressure the dividend if not resolved. For risk-averse investors, the stock offers stability with a beta of 0.482, but for growth-focused investors, the -10.43% relative underperformance versus SPY over the past year is a concern. Overall, it is a hold for current shareholders and a potential accumulate on dips below $78 for income portfolios.
EVRG is more suitable for long-term investment, particularly for income-focused investors seeking stable dividends and low volatility. The stock's beta of 0.482 indicates low market correlation, making it a defensive holding, but its negative free cash flow and high payout ratio require a multi-year horizon to resolve. Short-term trading is less attractive due to the stock's range-bound technical pattern, with resistance at $88.62 and support at $77.66, and light volume of 1.48 million shares. The 3.67% dividend yield provides a steady income stream, but the 71.66% payout ratio means dividend growth is likely to be minimal. A minimum holding period of 2-3 years is recommended to allow the capex program to drive rate base growth and potentially improve free cash flow. Earnings visibility is moderate, with analyst estimates for $5.97 EPS providing some clarity, but regulatory outcomes remain a wildcard.