PPL Corporation: Regulatory Review Impacts Valuation Amid Rate Hike Proposal

The Pennsylvania Public Utility Commission is conducting a formal investigation into PPL's proposed annual revenue increase, temporarily halting planned rate hikes for approximately 1.5 million customers. Despite regulatory scrutiny, PPL has demonstrated strong stock performance with 16.1% year-to-date gains and 18.9% total shareholder returns over twelve months. The company's three-year total shareholder return reaches an impressive 56%.

PPL has outlined ambitious infrastructure plans involving $20 billion in grid infrastructure and generation capacity upgrades through 2028. These investments are projected to generate nearly 10% average annual rate base growth, supporting increased regulated revenues and future earnings potential.

Additionally, PPL has established a joint venture with Blackstone Infrastructure to develop contracted generation projects specifically for data centers, creating potential value not yet fully recognized by the market. Current analyst valuations suggest PPL remains slightly undervalued, with a fair value estimate of $39.92 compared to the current trading price of $37.35.