Xcel Energy Could Hit $89 by Year-End as UBS Argues Wildfire Risks Are Already Priced Into $76.75 Stock

Xcel Energy (NASDAQ:XEL) has delivered a 14% gain over the past year,  and analysts cluster around a consensus target of $88.44. UBS cut its price target to $89 from $93 while keeping its Buy rating, arguing the recent selloff has pushed the stock below UBS’s assessed fair value. That target implies meaningful upside from current levels. But can XEL realistically reach $89 by end of 2026?

UBS’s $89 XEL Prediction

UBS remains a buyer of shares based on top-quartile EPS growth of 9%+ and upcoming catalysts that could improve valuation, with the stock now implying sub-7% growth after recent underperformance. The firm argues that wildfire and regulatory concerns appear overly discounted at current levels. With Xcel guiding to 2026 ongoing EPS of $4.04 to $4.16 and a long-term EPS growth target of 6% to 8%+, UBS sees the market mispricing a utility with one of the strongest earnings track records in the sector.

Key Drivers of XEL Stock Performance

1. $60 billion capital plan: Xcel’s five-year base capital expenditure plan covering 2026 through 2030 totals $60 billion, targeting transmission, renewables, and grid infrastructure, supporting the rate base growth that drives regulated utility earnings.
2. Data center demand surge: Xcel’s contracted data center pipeline has doubled to 6 GW by end-2027, with strategic partnerships including Google. The Colorado utility commission approved a load forecast reflecting 3% compound annual sales growth through 2031 with approximately 5,400 MW of generation capacity needed, a durable demand tailwind.
3. Dividend growth consistency: Xcel has raised its dividend for 23 consecutive years, with the current quarterly payout at $0.5925 per share and an annualized yield near 3.1%. The company targets annual dividend increases of 4% to 6%.

What Will It Take for XEL to Reach $89?

With 623.9 million shares outstanding, an $89 target implies a substantially higher market capitalization. Reaching that level likely requires three things: favorable resolution of pending wildfire liabilities, including the Smokehouse Creek Fire with estimated losses of $430 million before insurance; constructive rate case outcomes across multiple jurisdictions; and continued execution on the data center pipeline. CEO Bob Frenzel noted that Xcel delivered on its earnings guidance for “the 21st year in a row”, underpinning confidence in the 2026 guidance range.

The primary risk remains wildfire liability, where potential losses could exceed $500 million in insurance coverage and a Texas Attorney General lawsuit against SPS remains active. Still, with insider activity trending toward net buying and UBS seeing the risk-reward skewed to the upside, the $89 target reflects a view that the market is punishing Xcel for risks already largely priced in.