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WEC Energy Named Top US Utility Pick by Scotiabank Amid Data Center Boom
Scotiabank has named WEC Energy Group (WEC) its top overall pick in the U.S. utilities and power sector, highlighting the company's growth potential and consistent performance in a recent analysis of second-quarter 2026 earnings.
WEC Leads the Pack
According to Scotiabank, WEC Energy Group presents a unique combination of above-average earnings per share (EPS) growth, significant potential upside to its capital expenditures, and a decades-long history of stability. The bank's analysts believe these strengths are not fully reflected in the stock's modest 5% price-to-earnings premium over its peers.
The firm noted that two key data center projects are progressing ahead of schedule and expressed confidence that they will ultimately be larger than WEC has conservatively budgeted for. WEC reported second-quarter 2026 EPS of $0.91, beating the consensus estimate of $0.80. However, for a contrasting view, Ladenburg Thalmann recently downgraded WEC to Neutral from Buy, citing potential political opposition to future data center development.
Sector-Wide Opportunities
Scotiabank's report, which followed a generally positive earnings season where 11 of the first 15 reporting companies beat consensus estimates, identified several key themes driving the sector. These include strong execution on data center opportunities, growth in capital spending, and favorable regulatory progress.
AdOther utilities also received bullish commentary from the bank:
- Entergy (ETR): Praised for its strong execution and positioning.
- CMS Energy (CMS): Noted for its consistent track record and an accommodating regulatory environment in Michigan.
- CenterPoint Energy (CNP): Highlighted for a strong quarterly beat and another increase in its capital expenditure plan, partly driven by submitting 14GW of projects into the ERCOT review process.
Mixed Views on Other Major Players
Scotiabank remains "cautiously optimistic" about NextEra Energy (NEE), acknowledging its recent stock underperformance but noting it is well-positioned to serve growing data center demand. The bank is less favorable on Eversource Energy (ES), maintaining a Sector Underperform rating.
Despite crediting Eversource for improving its balance sheet, Scotiabank's analysts stated they see more downside risk to earnings than upside opportunities. They expect negative headlines to continue weighing on investor sentiment in the near term.
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