CPK: Initiating at Equal Weight, $132 PT

研报英文原文证据摘录

CPK: Initiating at Equal Weight, $132 PT

incremental capex. We

see potential for a modest tailwinds from refinancing and consolidating some of the multi-tranche

acquisition debt (annual maturities though 2031). CPK scale should allow for terming out financing

and potentially locking some benefits vs. current the coupon (i.e., lower risk, modest EPS impact vs.

plan).

Catalysts are largely focused on regulatory filings and settling into a faster cadence of GRCs across

jurisdictions. The states screen low risk, in our view, especially as gas utilities have been a lower

share of wallet, experience significant customer count growth (i.e., lower revenue requests), and

have recent rate case activity in 2025 (i.e., no surprises for regulators). MD, DE, & FL Electric Rate

Cases all successfully completed cases in 2025.

Where is there room to exceed expectations? Capital expansion and O&M reduction. CPK continues

to lock in incremental capex on top of the approved projects and cyclical infrastructure projects. On

the FCG side, mgmt. has about $250M of capex locked in, which is ~50% of the initial 5-year goal and

identified in year 2 of ownership (i.e., room to go in our view). On the pipeline expansion side, mgmt.

continues to look for opportunities, especially as customer counts continue growing. Gas services

continue to shine with Marlin utilization improvements (as well as more stable contracts vs. volatile

on-demand type services). On the O&M front, CPK mgmt. noted that cost benchmarks can still be

improved with scale, and the strategic transformation has been providing a platform to do so (in

particular with the 1CX platform). While mgmt. does not call out synergies specifically, shared service

optimization can help support medium to long-term outcomes.