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Dominion Energy (NYSE:D) -0.7% in Wednesday's trading as Bank of America reiterates its Underperform rating with a reduced $41 price target, trimmed from $44, after shares have bounced ~7% off recent lows with the pendulum fully swinging from bearish to bullish sentiment.
BofA's Julien Dumoulin-Smith cited a "constrained balance sheet" in guiding for ~4% compound annual growth rate for 2025-28, below Wall Street consensus and materially lower than Dominion's (D) last long-term guidance, even with 9%-10% Virginia rate base growth.
The analyst said he sees risks outweighing opportunities ahead, noting Dominion (D) has regulatory, legislative, capital markets/M&A and construction uncertainty that warrants a discount, while also expecting sub-1% dividend growth for the company.
"The market is under-appreciating the degree of earnings rebase and uncertainty in 2023 and beyond" for Dominion (D), Dumoulin-Smith said.