Dominion Energy
D
$61.02
-0.47%
Dominion Energy is a Richmond, Virginia-based integrated utility holding company that generates, transmits, and distributes electricity and natural gas across Virginia, South Carolina, and several other states, operating over 31 gigawatts of electric generation capacity and more than 91,000 miles of electric transmission and distribution lines. As one of the largest regulated electric utilities in the U.S., Dominion is a rate-regulated monopoly in its core service territories, providing a stable, dividend-focused investment profile distinct from merchant power or unregulated energy companies. The current investor narrative is dominated by the pending $67 billion acquisition by NextEra Energy, announced in mid-2026, which has created a merger-arbitrage dynamic and raised questions about the strategic rationale and regulatory approval path. Simultaneously, the broader utility sector is experiencing an AI-driven power demand supercycle, with data centers driving record capital expenditure across the industry, and Dominion is advancing its 5.2 GW Coastal Virginia Offshore Wind project, a major rate-regulated renewable investment that could reshape its generation mix and earnings growth trajectory.…
D
Dominion Energy
$61.02
Related headlines
D 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Dominion Energy's 12-month outlook, with a consensus price target around $71.92 and implied upside of +17.9% versus the current price.
Average Target
$71.92
0 analysts
Implied Upside
+17.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$63 - $87
Analyst target range
Dominion Energy is covered by 12 analysts, with a consensus recommendation of 'Buy' (recommendation mean of 2.5, where 1 is Strong Buy and 5 is Strong Sell). The average target price is $71.92, which implies an upside of approximately 17.3% from the current price of $61.31. The consensus leans bullish, with a majority of analysts rating the stock as a Buy or equivalent. The estimated EPS average for the upcoming year is $4.67, with a low of $4.35 and a high of $5.15, and estimated revenue average of $23.62 billion. The bullish sentiment is likely driven by the pending merger with NextEra Energy, which could unlock value, and the AI-driven demand for electricity. The target price range spans from a low of $63.00 to a high of $87.00, representing a wide spread of 38% from the low to high. The high target of $87.00 assumes successful merger completion, regulatory approvals, and significant growth from AI data center demand and renewable projects, potentially leading to multiple expansion. The low target of $63.00, just 2.8% above the current price, prices in risks such as merger failure, regulatory hurdles, margin compression, or execution issues with the offshore wind project. Recent institutional ratings show a mix of actions: TD Cowen upgraded to Buy from Hold on August 19, 2026, and Jefferies upgraded to Buy from Hold on May 28, 2026, indicating some positive momentum. However, Morgan Stanley maintained Equal Weight on September 18, 2026, and Truist Securities maintained Hold on August 13, 2026, suggesting that not all analysts are convinced. The wide target spread signals high uncertainty, primarily due to the merger and the capital-intensive nature of the business. Overall, the analyst community sees moderate upside but acknowledges significant risks, and the recent upgrades suggest a slightly improving sentiment.
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Bulls vs Bears: D Investment Factors
The bear case currently has stronger evidence due to Dominion's recent underperformance, negative free cash flow, and high debt levels. The stock has fallen 12.10% over three months, significantly lagging the S&P 500, and is trading near the lower end of its 52-week range. However, the bull case is supported by a 4.55% dividend yield, a low PEG ratio of 0.405, and 17.3% upside to analyst targets. The most critical tension is the pending merger with NextEra Energy: if approved, it could unlock substantial value and drive the stock toward the high target of $87; if it fails or faces delays, the stock could retest its 52-week low of $55.85. This binary outcome makes the investment highly dependent on regulatory developments.
Bullish
- Attractive Dividend Yield: Dominion offers a 4.55% dividend yield, significantly above the S&P 500 average, supported by a sustainable 75.98% payout ratio. This provides steady income, especially appealing in volatile markets.
- Undervalued Relative to Growth: The PEG ratio of 0.405 suggests the stock is undervalued given its expected earnings growth. The trailing PE of 16.93 and forward PE of 16.07 are below the broader market and near the low end of Dominion's historical range.
- Strong Revenue Growth: Q2 2026 revenue grew 19.63% year-over-year to $4.558 billion, following 26.2% growth in Q1 2026. This double-digit growth is driven by rate adjustments and increased electricity demand.
- Analyst Upside Potential: The average analyst target price is $71.92, implying 17.3% upside from the current price of $61.31. Recent upgrades from TD Cowen and Jefferies reflect improving sentiment.
Bearish
- Negative Free Cash Flow: Dominion generated negative free cash flow of -$6.825 billion TTM, with Q2 2026 FCF of -$1.201 billion. Heavy capital expenditures, particularly on the Coastal Virginia Offshore Wind project, strain the balance sheet.
- High Debt Burden: The debt-to-equity ratio of 1.68 is elevated, and the current ratio of 0.77 indicates potential liquidity tightness. Rising interest expenses ($546 million in Q2 2026) further pressure profitability.
- Recent Stock Underperformance: Dominion has declined 7.18% over the past month and 12.10% over three months, significantly underperforming the S&P 500. The stock is trading at just 40.2% of its 52-week range, signaling weak momentum.
- Merger Uncertainty: The pending acquisition by NextEra Energy introduces regulatory and execution risks. The wide analyst target range ($63 to $87) reflects high uncertainty, and any setback could trigger a sharp sell-off.
D Technical Analysis
Dominion Energy's stock is in a clear intermediate-term downtrend despite a positive 1-year return of +0.36%. The current price of $61.31 sits at just 40.2% of its 52-week range (low of $55.85, high of $72.99), indicating that the stock has given back most of its gains from earlier in the year and is now trading in the lower half of its annual range. This positioning suggests weakening momentum and a potential test of the 52-week low if selling pressure persists, though the positive 1-year change implies the long-term trend is not entirely broken. The stock's beta of 0.622 indicates it is significantly less volatile than the broader market, which may appeal to risk-averse investors but also means it may lag during strong market rallies. Over the past month, Dominion has declined 7.18%, and over the past three months, it has fallen 12.10%, both significantly worse than the S&P 500's respective returns of +0.59% and +3.34%. This sharp underperformance is reflected in relative strength metrics: -7.77% over 1 month and -15.44% over 3 months, indicating that the stock is losing ground to the market at an accelerating pace. The 6-month change of -2.33% and YTD change of +3.49% further highlight the recent deterioration, as the stock has erased earlier gains. The divergence between the positive 1-year return and the negative 1-month and 3-month returns suggests a trend reversal or at least a significant correction, potentially driven by merger-related uncertainty or sector rotation. Key technical support lies at the 52-week low of $55.85, which represents a critical floor; a breakdown below this level could trigger further selling and signal a deeper bearish trend. Resistance is established at the 52-week high of $72.99, and a breakout above this level would be required to confirm a new uptrend. The max drawdown of -15.92% over the past year indicates that the stock has experienced significant peak-to-trough declines, and with a beta of 0.622, its moves are less volatile than the market, but the recent underperformance suggests idiosyncratic headwinds. Volume of 3.87 million shares is moderate, and without RSI data, the magnitude of the recent decline suggests the stock may be approaching oversold territory, but confirmation is needed.
Beta
0.62
0.62x market volatility
Max Drawdown
-15.9%
Largest decline past year
52-Week Range
$56-$73
Price range past year
Annual Return
-0.8%
Cumulative gain past year
| Period | D Return | S&P 500 |
|---|---|---|
| 1m | -7.3% | +0.6% |
| 3m | -12.6% | +3.6% |
| 6m | -3.4% | +14.6% |
| 1y | -0.8% | +15.8% |
| ytd | +3.0% | +13.6% |
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D Fundamental Analysis
Dominion Energy's revenue trajectory has been volatile but recently showed strong growth. In Q2 2026, revenue reached $4.558 billion, representing a 19.63% year-over-year increase from $3.81 billion in Q2 2025. This acceleration follows a Q1 2026 revenue of $5.144 billion (up 26.2% YoY) and Q4 2025 revenue of $4.093 billion (up 20.4% YoY), indicating a consistent pattern of double-digit growth over the past three quarters. The revenue growth is primarily driven by the Dominion Energy Virginia segment, which generated $3.422 billion, followed by Dominion Energy South Carolina at $878 million and Contracted Energy at $299 million. The strong growth likely reflects increased electricity demand, rate adjustments, and the impact of the ongoing merger with NextEra Energy. However, the sustainability of this growth depends on regulatory approvals and the successful integration of the merger. Profitability remains solid, with Q2 2026 net income of $340 million and a net margin of 7.46%, though this is lower than the 12.07% net margin in Q1 2026 and the 14.32% in Q4 2025. The gross margin in Q2 2026 was 49.67%, relatively stable compared to 51.57% in Q1 2026 and 44.91% in Q4 2025. The operating margin was 23.48% in Q2 2026, down from 27.99% in Q1 2026 but up from 18.47% in Q4 2025. The decline in net income from Q1 to Q2 2026 was partly due to higher interest expenses ($546 million vs. $553 million in Q1) and lower operating income ($1.07 billion vs. $1.44 billion in Q1). Despite the sequential decline, the company remains profitable, and the TTM net margin is 18.16%, which is healthy for a regulated utility. The balance sheet shows a debt-to-equity ratio of 1.68, which is elevated but typical for capital-intensive utilities. The current ratio of 0.77 indicates potential liquidity tightness, as current liabilities exceed current assets. Free cash flow is negative, with TTM FCF of -$6.825 billion, reflecting heavy capital expenditures, particularly on the Coastal Virginia Offshore Wind project and other infrastructure. Operating cash flow in Q2 2026 was $1.575 billion, but capital expenditures were $2.776 billion, resulting in negative free cash flow of -$1.201 billion for the quarter. The company relies on external financing, as evidenced by net cash from financing of $1.193 billion in Q2 2026. ROE is 10.31%, which is respectable for a utility, but the negative FCF and high debt levels pose financial risk, especially if interest rates rise or if the merger disrupts operations.
Quarterly Revenue
$4.6B
2026-06
Revenue YoY Growth
+19.6%
YoY Comparison
Gross Margin
49.7%
Latest Quarter
Free Cash Flow
$-6.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is D Overvalued?
Since Dominion Energy reported positive net income (TTM net income of $340 million in Q2 2026, and positive earnings in prior quarters), the PE ratio is the appropriate primary valuation metric. The trailing PE ratio is 16.93, while the forward PE is 16.07, indicating that the market expects modest earnings growth. The small gap between trailing and forward PE suggests that analysts anticipate only slight improvement in earnings over the next year, which is consistent with the stable, regulated nature of the utility business. The PEG ratio of 0.405 is notably low, suggesting that the stock may be undervalued relative to its expected growth rate, though this metric can be less reliable for utilities with slow growth. Comparing Dominion's valuation to the broader utilities sector, the industry average PE is not provided in the data, but typically regulated electric utilities trade at a premium to the market due to their stable cash flows. Dominion's PE of 16.93 is below the S&P 500 average but may be in line with or slightly below utility peers. The price-to-book ratio of 1.72 is moderate, and the price-to-sales ratio of 3.03 is reasonable for a utility. The dividend yield of 4.55% is attractive and well above the market average, supported by a payout ratio of 75.98%, which is sustainable but leaves limited room for error. Historically, Dominion's PE ratio has ranged from around 12 to 46 over the past few years, with the current 16.93 falling in the lower half of that range. The price-to-sales ratio of 3.03 is also below its historical average of around 10-13, though this is partly due to revenue growth. The current valuation appears to be near the lower end of its historical band, which could present a value opportunity if the company can maintain its earnings and dividend, but it also reflects the market's concerns about the merger and the negative free cash flow.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 12x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.3x
Enterprise Value Multiple
Investment Risk Disclosure
Dominion faces significant financial and operational risks. The company's negative free cash flow of -$6.825 billion TTM, driven by heavy capital expenditures on the Coastal Virginia Offshore Wind project, raises concerns about its ability to fund operations without external financing. The debt-to-equity ratio of 1.68 is elevated, and the current ratio of 0.77 indicates potential liquidity tightness, as current liabilities exceed current assets. Additionally, net margin declined to 7.46% in Q2 2026 from 12.07% in Q1 2026, partly due to higher interest expenses of $546 million, which could further erode profitability if rates rise. These factors increase the risk of dividend cuts or equity dilution if cash flow remains negative.
Market and competitive risks are also prominent. Dominion's beta of 0.622 indicates lower volatility than the market, but the stock has underperformed significantly, with a 12.10% decline over three months versus the S&P 500's 3.34% gain. The utility sector is undergoing consolidation driven by AI power demand, and Dominion's merger with NextEra Energy introduces regulatory hurdles that could delay or block the deal. If the merger fails, the stock could lose its merger-arbitrage premium and face a revaluation. Furthermore, rising interest rates could compress utility valuations, as higher yields make dividend stocks less attractive. The recent news highlights NextEra's strong position, suggesting Dominion might be the weaker partner in the merger.
In a worst-case scenario, the merger could be blocked by regulators, leading to a sharp decline in Dominion's stock. The 52-week low of $55.85 represents a potential downside of 8.9% from the current price of $61.31. If the company also faces operational setbacks with its offshore wind project or a dividend cut due to cash flow issues, the stock could fall further, potentially to the analyst low target of $63 (which is actually above current price, but in a severe scenario, it could test the 52-week low). The max drawdown over the past year was -15.92%, indicating that a decline of 15-20% from current levels is plausible in an adverse scenario, translating to a price around $49-$52, though the 52-week low provides a more immediate floor.
