Evergy Inc.: West Coast NDR: Large Load Inflection Has Further To Run

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Evergy Inc.: West Coast NDR: Large Load Inflection Has Further To Run

p for EPS execution in any given year.

Framing the Upcoming Roll-Forward: Base CapEx Moved Higher, Plan Can Extend to

2031: EVRG typically updates the 5yr financial plan in the 4th quarter and at the base case level,

we expect at least $1bn of incremental CapEx to the current $21.6bn 5yr capital plan, which

should drive RAB growth closer to 13% and keep the EPS outlook extended at 9.5% CAGR

through 2031. Incremental to this could be ESA’s discussed above which could be coming as

soon as the 3Q call and would then increase the size of the capital plan yet again. EVRG is

working hard to put downward pressure on equity issuance (40% of new capex) to fund growth

and should be able to continue to minimize financing drag as new cash flow materializes from

large load contracts.

Financing Outlook: ATM Preferred Over Block in Near Term: Discussions highlighted the

current $3.3bn of equity needed throughout the plan ($700-900mn/yr), and mgmt continues to

see the preferable way to issue this being utilizing the ATM. Mgmt does seem like its slightly

behind on issuance in our view but we also understand the plan is rapidly changing as CapEx

opportunities are mounting, ESA's have momentum and mgmt is essentially in 1:1 capacity

need for every new MW of load on the system. A block in our view could be contemplated late

this year or early next year depending on what the new plan looks like - but for now mgmt

prefers the ATM. It seems that not much of the ATM was priced so far this year, and we calculate

EVRG would need to be about 3.5% of ADTV for the rest of the year to execute ~$700mn of

remaining equity needs for 2026. This should have no outsized effect on the stock in our view

given its low-single digits ADTV.