CenterPoint Energy Inc (CNP.N): Batch Zero to Add More Houston Growth than Expected, +1.2B Capex

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CenterPoint Energy Inc (CNP.N): Batch Zero to Add More Houston Growth than Expected, +1.2B Capex

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28 Jul 2026 12:36:43 ET │ 15 pages

CenterPoint Energy Inc (CNP.N)

Batch Zero to Add More Houston Growth than Expected, +1.2B Capex

CITI'S TAKE

CNP reported 2Q26 EPS of $0.40 and reiterated FY26 EPS guidance of

$1.89-$1.91, while raising its 10yr capital plan +$1.2B to $66.7B with no

change to equity guide (+$1.2B was more than expected). The key Neutral

incremental takeaway was Texas growth, with CNP expecting ~10GW of Price (27 Jul 26 16:00) US$44.01

baseload (~29% of TX allocation) and ~4GW of studied load to qualify for

Target price US$47.00Batch Zero load growth through 2030 (only ~3GW to not get allocated). CNP

also reiterated that 2H26 transmission study timeline target. Expected share price return 6.8%

Expected dividend yield 2.1%

Houston to Capture Meaningful Batch Zero Market Share — CNP expects Expected total return 8.9%

approximately 14GW of its 17GW of Batch Zero submissions to qualify as baseload

or studied load, with nearly all projects expected online by year-end ‘30. Market Cap US$28,790M

Management noted the projects have already provided meaningful financial

commitments from customers and continue to support its long-term Houston

growth outlook. In our view, this number is greater than our expectation and

includes 10GW or ~29% is HE baseload of the ~35GW in the ERCOT prior disclosure. Price Performance

Based on our recent meetings with stakeholders in Texas, we were not expecting (RIC: CNP.N, BB: CNP US)

such a large portion of the baseload to show up in Houston. While positive, we have

some worries about how it will impact local Houston power prices. Formal ERCOT

update coming on August 7, 2026 with transmission to be finalized by April 2027.