Utilities Select Sector

S&P 500

The Balanced Allocator

Comparable Companies - EVRG

0 discretionary insider purchases and 6 discretionary insider sales; latest short interest 5.8% of float; top institutional holders Vanguard Group Inc (12.8%), BlackRock Inc (9.7%), State Street Corp (7.1%).

DIRECTOR

SVP & CHIEF PEOPLE OFFICER

Remains in the primary leadership role established in early 2021 following the company's strategic review.

Chairman, President and Chief Executive Officer

Continues to lead financial operations after joining from Duke Energy.

Executive Vice President and Chief Financial Officer

Verified as current via March 2026 Form 4 filings.

Senior Vice President, General Counsel and Corporate Secretary

Remains in role overseeing regulatory and customer relations.

Senior Vice President, Public Affairs and Chief Customer Officer

Verified as an active executive via March 2026 equity award filings.

Senior Vice President and Chief Operating Officer

Vice President and Chief Information Officer

Vice President, Finance and Investor Relations

Resigned to accept the CFO position at Vistra Corp.

Former Executive Vice President and CFO

Departed the company during a leadership reorganization.

Former Executive Vice President and COO

Continues in his permanent role following his tenure as Acting CFO.

Vice President, Corporate Planning and Treasurer

David Campbell

W. Bryan Buckler

Anthony Isaac

Sandra Price

David Campbell possesses a rare 'provenance' that combines high-level legal expertise with deep utility operational experience. His tenure at Vistra demonstrated an ability to manage complex balance sheet restructurings and large-scale M&A. At Evergy, he has successfully transitioned the company from a period of activist-driven uncertainty to a steady-state growth utility focused on the 'Sustainability Transformation Plan.' His leadership style is characterized by financial discipline and a focus on regulatory harmony, which has been critical in navigating the challenging Kansas and Missouri utility environments.

Implementation of the Sustainability Transformation Plan (STP)

W. Bryan Buckler is a career utility finance professional whose provenance is rooted in one of the largest regulated utilities in the U.S. (Duke Energy). His expertise lies in the intersection of long-term capital planning and regulatory rate-making. Since joining Evergy, he has been instrumental in aligning the company's financial strategy with its aggressive grid-modernization goals, ensuring that the capital-intensive transition to renewables remains accretive to shareholders.

Debt Financing for Infrastructure Investment

James Scarola

John Rolph

Thomas Newton

Regulated utility operations across six highly constructed jurisdictions, providing diversification in both asset type and regulatory environment.

Utility operations across multiple states

Regulated utility and nuclear generation operations with focus on infrastructure modernization and energy efficiency.

Building long-term value by supporting economic growth with focus on reliability, efficiency, financial discipline, environmental stewardship, customer care, and safety.

Evergy's physical asset base consists of electric generating stations (coal, nuclear, natural-gas, solar, wind and other renewables), approximately 10,100 circuit miles of transmission lines, and roughly 52,800 circuit miles of overhead and underground distribution lines, all recorded as property, plant and equipment (net $26.3 billion). The assets are owned by Evergy and its subsidiaries Evergy Kansas Central and Evergy Metro.

Evergy's management team under CEO David A. Campbell since 2021 presides over a financial story of 2.0% revenue growth to $5,961.6M in FY2025 driven by data-center load but strained by $2.8B CapEx, negative FCF of -$751.7M, Debt/Equity at 148.7%, and incremental ROIC of -0.9%, reflecting capital-intensive growth in a regulated utility archetype; while external track record and board governance provide credible utility expertise for asset management, weak capital allocation through debt-funded reinvestment without buybacks and poor incentive alignment evidenced by sub-0.1% insider ownership and net selling render the team adequate but not exceptional for delivering sustainable per-share returns amid rising leverage.

The Evergy Companies are subject to extensive and evolving federal, state and local environmental laws and regulations relating to air and water quality, waste management, hazardous substance disposal, protected natural resources and health and safety. Key regulatory risks include: Greenhouse Gas (GHG) regulations under the Clean Air Act (CAA), including EPA rules establishing CO2 limitations for new and existing fossil-fuel fired electric generating units (EGUs) and potential carbon capture and sequestration (CCS) requirements; Coal Combustion Residuals (CCR) regulations governing ash disposal units and legacy surface impoundments; Regional Haze Rule requirements for visibility protection in Class I areas; Ozone Interstate Transport State Implementation Plans (ITSIPs) and Federal Implementation Plans (ITFIPs) addressing cross-state air pollution; and revised National Ambient Air Quality Standards (NAAQS) for particulate matter (PM2.5). Compliance costs could be material, and regulatory changes may result in early asset retirements, stranded costs, or disallowance of prudent investments. The Evergy Companies believe their operations are in substantial compliance with current standards.

As of December 31, 2025, the Evergy Companies had 4,691 employees, including 2,479 represented by five local unions of the International Brotherhood of Electrical Workers (IBEW) and one local union of the United Government Security Officers of America (UGSOA). The workforce includes 1,882 generation employees, 1,468 transmission and distribution employees, and 1,341 support employees, primarily in Kansas and Missouri. Labor agreements expire at varying times from 2026 through 2028. The median employee pay ratio was approximately 50:1 for 2024.

Disclosures focus on customer assistance programs (e.g., Critical Medical Needs, Rehousing, Evergy Cares), energy efficiency initiatives under the Kansas Energy Efficiency Investment Act (KEEIA), and efforts to manage customer impacts from large load growth (e.g., data centers) through Large Load Power Service (LLPS) rate plans with safeguards for existing customers. No specific product quality, safety, or privacy disclosures were identified.

Supply chain disruptions, tariffs, and inflation pose risks to the procurement of equipment, materials, and resources necessary for operations and capital projects. The Evergy Companies rely on global supply chains, and constraints could delay construction, maintenance, or repair of critical items. Community efforts include the Green Team's environmental projects (e.g., tree planting, river cleanups) and charitable contributions. The company also engages in economic development to support growth in its service territory.

Revenue grew only 2.0% to $5.96 B in FY2025, adjusted EPS rose modestly to $3.83, free cash flow was –$751.7 M, debt‑to‑equity climbed to 148.7% and interest coverage slipped to 2.44×, indicating strained cash generation despite the growth narrative.

The Innovation Dossier and FY2025 Q4 transcript describe a $21.6 B capital plan (2026‑2030) focused on new natural‑gas, solar, and battery‑storage capacity to serve data‑center load, with $9.3 B earmarked for generation expansion; the FY2025 CapEx increase reflects the early execution of this plan, including construction of three new gas facilities and three solar farms totaling ~2,200 MW.

The annual report and transcript disclose no significant asset write‑downs in FY2025, and the auditor’s Critical Audit Matter focuses on rate‑regulation accounting rather than impairment, indicating that the asset base is largely intact; however, the lack of disclosed impairment dollars suggests that any future write‑downs would be material if load growth stalls.

The Innovation Dossier links the $21.6 B capital plan to new gas, solar, and battery assets, yet the Capital Allocation Appendix shows incremental ROIC negative, suggesting that these projects have not yet delivered economic returns and may be destroying value in the short term.

Elliott Investment Management

Term Loan Credit Agreement (February 2026)

Term Loan Credit Agreement (January 2026)

Convertible Notes (December 2023 issuance)

First Mortgage Bonds (FMB) - Evergy Kansas Central

Senior Notes - 3.49% (Evergy Missouri West)

EV/EBITDA

David A. Campbell

Geoffrey T. Ley

Kirkland B. Andrews

B. Anthony Isaac

Sandra J. Price

John W. Rolph

Thomas L. Newton

Cleveland O III

KING CHARLES L

Humphrey Heather A

Gummig Matthew B

Advisory vote to approve executive compensation (say on pay)

Resolution setting the frequency of future advisory votes on executive compensation (say on frequency)

Ratification of the appointment of Deloitte & Touche LLP as independent registered public accounting firm for 2025

Chief Executive Officer, President & Chairman of the Board

Former Executive Vice President and Chief Financial Officer

Vice President, Corporate Planning and Treasurer and former Acting Chief Financial Officer

Kevin E. Bryant

Former Executive Vice President and Chief Operating Officer

Charles A. Caisley

Executive Vice President, Public Affairs and Chief Customer Officer

Heather A. Humphrey

Evergy is an integrated electric utility operating in Kansas and Missouri. It generates, transmits, distributes and sells electricity to approximately 1.7 million customers, including residential, commercial, industrial, municipal and wholesale customers. The company was formed through the merger of several utilities in 2018 and now operates as a single consolidated reporting segment.

Integrated utility that generates, transmits, distributes and sells electricity in Kansas and Missouri, serving residential, commercial, industrial, municipal and wholesale customers.

Held base growth, terminal multiple (11.0x EBITDA), WACC 10.0% constant; solved backward from current price $82.36 (mkt cap $19240M) for required avg FCFF as % of TBV $7884.7M.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - EVRG

The utility sector is experiencing a 'peak' capital cycle driven by the energy transition and digital load growth. While this provides a tailwind for rate base expansion, it is occurring in a higher-interest-rate environment that pressures net margins. Evergy is underperforming its peers, with revenue growth of 2.0% compared to the peer median of 16.1%.

Evergy is relevant for analysis now because the stock is trading at a multi-year high while its credit metrics (2.44x interest coverage) and cash flow profile (-$751.7M FCF) are at their weakest point in the current cycle.

Rate Case Rulings in Kansas and Missouri Decisions on the recovery of the $21.6 billion capital plan will determine the company's ability to stabilize margins. Adverse rulings would immediately invalidate the 6-8% EPS growth narrative.

Equity Issuance Execution The planned $700M to $900M in annual equity issuances starting in 2026 will test market appetite and likely lead to significant EPS dilution.

Interest Rate Sensitivity and Refinancing Risk With 72.8% of debt maturing within three years, Evergy is highly exposed to higher-for-longer interest rates. A 100bps increase in refinancing costs would significantly compress net margins.

Regulatory Disallowance The massive $21.6 billion capital plan may face pushback from regulators concerned about customer affordability, leading to stranded assets or lower allowed returns.

Stewardship is adequate but uninspired. The board provides necessary technical expertise (e.g., James Scarola's nuclear oversight), but the lack of insider alignment is a major red flag. With insiders holding less than 0.1% of the company, there is little structural incentive to prioritize per-share value over absolute rate base growth.

Evergy's current asset base consists of a massive regulated utility infrastructure across Kansas and Missouri, including 15,812 MW of total generating capacity (owned and PPA-backed) and approximately 71,500 circuit miles of transmission and distribution lines (10,200 transmission, 44,600 overhead distribution, and 16,700 underground distribution). Per the P7 Transcript Analysis, the footprint is aggressively expanding with a $21.6 billion capital plan through 2030, which includes the approved construction of three new natural gas facilities and three solar farms totaling approximately 2,200 MW of new capacity. Furthermore, the company has secured Electric Service Agreements (ESAs) for 1.9 GW of steady-state data center load, which significantly enhances the strategic value of the existing grid and generation footprint beyond historical cost accounting.

Blackstone Infrastructure Partners acquired a 19.9% equity interest in NIPSCO (NiSource subsidiary) for $2.15 billion, implying a total enterprise value of approximately $14.3 billion for the regulated utility. This transaction reflected a premium to the regulated rate base, typical for high-quality T&D assets with growth tailwinds.

Recent secondary market sales of combined-cycle gas turbine (CCGT) generation assets in the SPP and PJM regions have consistently cleared at valuations between $650/kW and $850/kW depending on age and interconnection status.

Cash & Equivalents

Accounts Receivable

Evergy's inventory is bifurcated between highly liquid fuel commodities and specialized utility maintenance supplies. The fuel inventory, valued at $218.6 million, consists of coal, natural gas, and uranium, all of which have active secondary markets and high recovery potential. Conversely, the $610.3 million in supplies includes transformers, circuit breakers, and poles that are specific to Evergy's grid specifications. The healthy TTM turnover of 3.37x suggests that the inventory is not obsolete, but the specialized nature of the non-fuel components necessitates a conservative recovery estimate in any liquidation scenario. The blended recovery rate of 60.5% in the base case balances these two distinct asset classes.

Inventory

Other Current Assets

Net PP&E

Tax Assets (Deferred)

Intangibles

Long-Term Inv.

Other Non-Current

Accounts Payable

Current Debt

Other Current Liabilities

Non-Current Debt

Tax Liabilities (Deferred)

Other Non-Current Liabilities

Market/Sector Move -5.13%

Evergy price target raised to $82 from $76 at Mizuho

Evergy downgraded to Neutral from Buy at UBS

Evergy price target lowered to $91 from $93 at RBC Capital

Evergy price target raised to $79 from $77 at Wells Fargo

Evergy price target raised to $82 from $73 at Barclays

Evergy downgraded to Neutral from Outperform at Mizuho

Evergy price target raised to $83 from $81 at UBS

Evergy initiated with an Outperform at RBC Capital

Situation: Current price is $82.36 versus fair value $47.15 (-42.8% expected return), and valuation confidence is stable. Debate: Bull case depends on Rate Case Rulings in Kansas and Missouri Decisions on the recovery of the $21.6 billion capital plan will determine the company's ability to stabilize margins. Bear case centers on Interest Rate Sensitivity and Refinancing Risk With 72.8% of debt maturing within three years, Evergy is highly exposed to higher-for-longer interest rates. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

Executive Summary

The primary value driver is the pivot toward high-density data center loads, which management expects to accelerate EPS growth to 6-8% annually. This growth is intended to be unlocked by the $21.6 billion capital plan through 2030, while the downside is theoretically protected by the company's massive, regulated asset base and 71,500 miles of transmission and distribution infrastructure.<ul><li>Driver: Data-center and industrial load growth through a $21.6 billion capital plan.</li><li>Catalyst: Execution of Electric Service Agreements (ESAs) for 1.9 GW of steady-state capacity.</li><li>Protection: Regulated monopoly status with $26.3 billion in net property, plant, and equipment (PP&E).</li></ul>Our variant perception is that the market is obsessing over the 1.9 GW data center pipeline, missing the reality that this growth is being financed by record leverage and value-destructive reinvestment. While the consensus views the new Large Load Power Service (LLPS) tariffs as a de-risking mechanism, our analysis of the financial statements reveals that incremental ROIC has turned negative (-0.9%), and interest coverage has slipped to a thin 2.44x. We view this not as a growth story, but as a capital-intensive treadmill where the cost of debt and depreciation is eroding net margins (down to 14.4%) faster than the rate base can expand.This is a valuation-driven exit recommendation on a durable, cash-flowing asset portfolio where the market has mispriced the quality and sustainability of those cash flows due to an overblown focus on data center tailwinds.

Core Investment Rationale

Evergy operates as a regulated electric utility serving 1.6 million customers in Kansas and Missouri. The company generates revenue through the generation, transmission, and sale of electricity, with a strategy centered on the Sustainability Transformation Plan (STP). This plan involves retiring older coal units and investing in a $21.6 billion capital program focused on grid modernization and new generation capacity. Revenue is primarily derived from regulated rates, which are intended to provide a return on the company's massive asset base. However, the business model is currently under strain. While revenue grew 2.0% YoY to $5,961.6M in FY2025, free cash flow collapsed to -$751.7M. The strategy relies heavily on the execution of Electric Service Agreements (ESAs) for large-load customers, which management claims will provide revenue visibility through 80% minimum bill requirements.Evergy's core value is tied to its physical infrastructure. The company maintains 15,812 MW of total generating capacity and a transmission and distribution (T&D) network spanning 71,500 circuit miles. This includes 10,100 miles of transmission lines and 52,800 miles of distribution lines. The asset base is recorded at a net book value of $26.3 billion, comprising approximately 77% of total assets. Recent additions to the portfolio include the approved construction of three new natural gas facilities and three solar farms totaling 2,200 MW of new capacity to support the 1.9 GW data center pipeline.Evergy operates as a regulated monopoly within its service territories, shielding it from direct retail competition. However, it competes for capital and industrial load against regional peers such as Entergy (ETR), NiSource (NI), and WEC Energy Group (WEC). Evergy is the smallest of this peer group by market capitalization ($19.1B vs. ETR's $47.4B). While the pricing environment remains rational with gross margins at 52.3%, Evergy's ROIC of 3.6% trails the peer median of 4.0%, indicating inferior operational efficiency relative to its regulated asset base.Evergy was formed in 2018 through the merger of Westar Energy and Great Plains Energy. Following a 2020 settlement with activist Elliott Management, the company appointed David Campbell as CEO and pivoted to a standalone Sustainability Transformation Plan. Since 2021, the asset base has evolved through a massive $10.7 billion investment cycle, which has recently been expanded to a $21.6 billion plan through 2030. This aggressive expansion has fundamentally altered the balance sheet. Debt has climbed to $15.2 billion, pushing the Debt/Equity ratio to 148.7% in FY2025. While management has successfully stabilized relations with the Kansas Corporation Commission (KCC), the historical narrative of a stable, high-yield utility has been replaced by one of a high-leverage growth vehicle. The current situation is defined by a 2025 earnings miss where weather-normalized demand grew only 0.3%, failing to offset weak industrial performance, even as the company prepares for $700M to $900M in annual equity issuances starting in 2026.

Business & Situation

<ul><li>Bull Case: The 1.9 GW data center pipeline and Panasonic manufacturing plant provide a transformative load growth tailwind that could accelerate EPS growth to over 8% annually by 2028. New LLPS tariffs with 80% minimum bills provide unprecedented revenue protection for large-scale infrastructure investments.</li><li>Bear Case: The company is destroying value with an incremental ROIC of -0.9%, meaning new capital investments are returning less than the cost of capital. Massive leverage (5.6x Net Debt/EBITDA) and a front-loaded maturity schedule (72.8% of debt due by 2028) create significant solvency and dilution risk.</li></ul>The market currently views Evergy as a prime beneficiary of the AI-driven data center boom. Investors are pricing in the 6-8% EPS growth target, assuming that the regulatory framework in Kansas and Missouri will allow for seamless cost recovery of the $21.6 billion capital plan. This narrative has pushed the stock to trade near its 52-week high of $85.23, despite a 2.0% revenue growth rate that significantly lags peers.The utility sector is experiencing a 'peak' capital cycle driven by the energy transition and digital load growth. While this provides a tailwind for rate base expansion, it is occurring in a higher-interest-rate environment that pressures net margins. Evergy is underperforming its peers, with revenue growth of 2.0% compared to the peer median of 16.1%.Our differentiated view is that Evergy's growth is 'profitless expansion.' While management highlights the 1.9 GW pipeline, the financial reality is that net margin has fallen to 14.4% as interest expense (up 9.5% to $616.3M) and depreciation erode the benefits of rate increases. The market is ignoring the 'value drift' caused by a management team with minimal skin in the game (0.08% ownership) that is issuing debt to fund projects with sub-par returns. The lack of insider buying and the recent 55% position reduction by a director suggest that those closest to the assets do not share the market's enthusiasm for the current valuation.We conclude that the bull case relies on optimistic long-term projections that are contradicted by current-year performance and balance sheet strain. The stock is priced for perfection in an industry where execution risks and regulatory friction are the norm.Our analytical edge is a granular decomposition of the capital cycle and reinvestment efficiency. By identifying the negative incremental ROIC (-0.9%) and the front-loaded debt maturity profile, we recognize a looming capital crunch that the market's focus on GW-capacity targets has overlooked.

Core Thesis

CEO David Campbell brings significant utility experience from Vistra Corp and Luminant, having overseen the $1.7 billion Dynegy acquisition. However, since taking the helm at Evergy in 2021, he has presided over a period where capital intensity has outpaced cash generation. CFO Bryan Buckler, formerly of Duke Energy, has managed the financing of the $21.6 billion plan, but the resulting leverage profile is aggressive for the current rate environment.Capital allocation skill is weak. The company has invested $11.6 billion in CapEx over the last 4.8 years while generating negative free cash flow and destroying value on an incremental basis (-0.9% ROIC). No buybacks have been executed, and shareholders have faced net dilution of $113.6M.Management's communication is polished but lacks candor regarding the erosion of net margins. While they emphasize 'affordability,' the reality is that interest and depreciation costs are rising faster than the company's ability to offset them through rates.<ul><li>Board Independence: 60% (3 of 5 directors)</li><li>Chairman/CEO Roles: Combined (David Campbell)</li><li>Chairman Tenure: 5 Years</li><li>Insider Ownership: 0.08% (CEO)</li><li>Shareholder Rights: Proxy Access (25% of board), No Poison Pill</li></ul>Stewardship is adequate but uninspired. The board provides necessary technical expertise (e.g., James Scarola's nuclear oversight), but the lack of insider alignment is a major red flag. With insiders holding less than 0.1% of the company, there is little structural incentive to prioritize per-share value over absolute rate base growth.

Leadership & Governance

The valuation floor is anchored to the Net Liquidation Value (NLV) of $15.98. This reflects the most conservative estimate of the asset base, applying a 20% discount to T&D assets and valuing generation at a salvage-heavy $300,000 per MW in a distressed regulatory scenario.The base case assumes 3.8% revenue growth and 25% operating margins as the data center load begins to ramp. However, high CapEx ($2.8B+) keeps free cash flow negative, and the fair value is estimated at $47.15 based on a weighted average of comparable multiples and asset value.The bull case assumes a full 1.9 GW ramp and the realization of the 2-3.5 GW advanced pipeline, driving fair value to $48.33 (Blue-Sky Potential).The bear case is anchored to the NLV of $15.98. In this scenario, persistent industrial weakness and regulatory disallowances on the $21.6 billion capital plan impair the equity value, forcing the market to price the stock on its net realizable asset value.

Valuation Context

<ul><li>Rate Case Rulings in Kansas and Missouri Decisions on the recovery of the $21.6 billion capital plan will determine the company's ability to stabilize margins. Adverse rulings would immediately invalidate the 6-8% EPS growth narrative.</li><li>Equity Issuance Execution The planned $700M to $900M in annual equity issuances starting in 2026 will test market appetite and likely lead to significant EPS dilution.</li><li>Evergy is relevant for analysis now because the stock is trading at a multi-year high while its credit metrics (2.44x interest coverage) and cash flow profile (-$751.7M FCF) are at their weakest point in the current cycle.</li></ul>Evergy is relevant for analysis now because the stock is trading at a multi-year high while its credit metrics (2.44x interest coverage) and cash flow profile (-$751.7M FCF) are at their weakest point in the current cycle.

Catalyst Path & Context

<ul><li>Interest Rate Sensitivity and Refinancing Risk With 72.8% of debt maturing within three years, Evergy is highly exposed to higher-for-longer interest rates. A 100bps increase in refinancing costs would significantly compress net margins. Interest expense already rose 9.5% to $616.3M in FY2025.</li><li>Regulatory Disallowance The massive $21.6 billion capital plan may face pushback from regulators concerned about customer affordability, leading to stranded assets or lower allowed returns. Evergy's ROIC of 3.6% is already below its allowed ROE of 9.75%.</li><li>Stewardship is adequate but uninspired. The board provides necessary technical expertise (e.g., James Scarola's nuclear oversight), but the lack of insider alignment is a major red flag. With insiders holding less than 0.1% of the company, there is little structural incentive to prioritize per-share value over absolute rate base growth. Risk monitor: Current price $82.36 vs fair value $47.15, expected return -42.8%.</li></ul>

Primary Risks

<ul><li>Entry Target: No new entries: recommendation is Sell.</li><li>Stop Loss: No stop-loss needed because recommendation is Sell (no position).</li><li>Position Size: Position size is None under current recommendation and risk constraints.</li><li>Time Horizon: N/A for a Sell recommendation.</li></ul><ul><li>Management's reliance on 11.5% annual rate base growth through 2030 requires continuous and favorable regulatory outcomes.</li><li>FY2025 Q4 transcript confirms equity needs of $700-$900 million annually from 2026-2029.</li><li>Interest expense already rose 9.5% to $616.3M in FY2025.</li></ul>A permanent, negative change to the regulatory framework in Kansas or Missouri that prevents the recovery of the $21.6 billion capital plan. Also require valuation reliability to improve before re-entering.

Actionable Parameters & Monitoring

EVRG appears overvalued (fair value $47.15 vs current $82.36, expected return -42.8%). Recommendation: Sell; do not allocate until valuation and risk profile reset.

Final Conclusion

Data-center and industrial load growth through a $21.6 billion capital plan.

Driver

Execution of Electric Service Agreements (ESAs) for 1.9 GW of steady-state capacity.

Catalyst

Regulated monopoly status with $26.3 billion in net property, plant, and equipment (PP&E).

Protection

The 1.9 GW data center pipeline and Panasonic manufacturing plant provide a transformative load growth tailwind that could accelerate EPS growth to over 8% annually by 2028. New LLPS tariffs with 80% minimum bills provide unprecedented revenue protection for large-scale infrastructure investments.

Bull Case

The company is destroying value with an incremental ROIC of -0.9%, meaning new capital investments are returning less than the cost of capital. Massive leverage (5.6x Net Debt/EBITDA) and a front-loaded maturity schedule (72.8% of debt due by 2028) create significant solvency and dilution risk.

Bear Case

Situation: Current price is $82.36 versus fair value $47.15 (-42.8% expected return), and valuation confidence is stable. Debate: Bull case depends on Rate Case Rulings in Kansas and Missouri Decisions on the recovery of the $21.6 billion capital plan will determine the company's ability to stabilize margins. Bear case centers on Interest Rate Sensitivity and Refinancing Risk With 72.8% of debt maturing within three years, Evergy is highly exposed to higher-for-longer interest rates. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

The strategy evolved from a foundational focus on regulatory settlements and a moderate 4-6% long-term EPS growth target through 2029, anchored by an initial 750 MW large-load pipeline (Google, Panasonic, Meta), to an aggressive capital-intensive expansion phase. This pivot is defined by the execution of binding Electric Service Agreements (ESAs) under new Large Load Power Service (LLPS) tariffs, a significantly expanded $21.6 billion capital plan (2026-2030), and a raised long-term adjusted EPS growth target of 6-8% plus through 2030, with acceleration above 8% from 2028. The narrative shifted from announcing potential economic development wins to securing contractual revenue visibility and funding a massive grid modernization and generation build-out.

Method	Implied Value	Weight	Weighted Value
Comps	$59.72	65%	$38.82
Historicals	$43.41	10%	$4.34
NLV	$15.98	25%	$4.00
Total Weighted			$47.15

EVRG

Company Overview

Price History