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A Look At DTE Energy (DTE) Valuation After Major 1.4 GW Data Center Agreement

Simply Wall St · 4d ago

DTE Energy (DTE) shares are back in focus after the utility signed a 1.4 GW agreement to supply power to a hyperscaler data center customer, while also negotiating an additional 3 GW of potential load.

See our latest analysis for DTE Energy.

The data center agreement comes after a softer stretch for the shares. The 90 day share price return of 8.43% and year to date share price return of 1.61% are both in decline, even as the 1 year, 3 year and 5 year total shareholder returns of 9.57%, 17.91% and 45.87% respectively point to momentum that has built over time rather than faded.

If this kind of large scale power demand story has your attention, it could be a good moment to widen your search and check out fast growing stocks with high insider ownership.

With DTE trading at $128.26, sitting at an 8.09% intrinsic discount and about 15.72% below the average analyst price target, you have to ask: is this a genuine opportunity, or is the market already baking in future growth?

Most Popular Narrative: 14% Undervalued

Compared with DTE Energy's last close at $128.26, the most followed narrative places fair value materially higher, built on a detailed earnings and cash flow roadmap.

The analysts have a consensus price target of $145.615 for DTE Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $158.0, and the most bearish reporting a price target of just $125.0.

Read the complete narrative.

There is a lot going on under that headline number. Revenue growth assumptions, margin shifts, and a richer future earnings multiple all sit at the core. Curious which combination really moves the fair value needle here? The full narrative lays out the earnings path, the projected profitability step up, and how those feed into the valuation math.

Result: Fair Value of $149.15 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there is still real execution and regulatory risk here, particularly if large capital projects run over budget or future rate cases face pushback.

Find out about the key risks to this DTE Energy narrative.

Build Your Own DTE Energy Narrative

If you see the numbers differently or prefer to piece together your own view from the data, you can build a custom thesis in minutes with Do it your way.

A great starting point for your DTE Energy research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If DTE has sparked your interest, do not stop here. Broaden your watchlist with other themes that could fit your goals and risk appetite.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.