WEC

Utilities

WEC Energy Group

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Market Data

Financials

XBRL · SEC EDGAR

2011–2025(15yr)

Revenue

Net Income

Free CF

Metric	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$4.5B	$4.2B	$4.5B	$5.0B	$5.9B	$7.5B	$7.6B	$7.7B	$7.5B	$7.2B	$8.3B	$9.6B	$8.9B	$8.6B	$9.8B	+14.0%
Gross Profit	—	—	$2.7B	$2.7B	$3.7B	$4.8B	$4.8B	$4.8B	$4.8B	$4.9B	$5.0B	$5.2B	$5.7B	$5.9B	$6.5B	+9.9%
Gross Margin	—	—	59.6%	54.8%	62.2%	64.6%	63.1%	62.3%	64.4%	68.0%	60.2%	54.6%	64.1%	69.1%	66.7%	-2.4pp
Operating Income	$887.3M	$1.0B	$1.1B	$1.1B	$1.3B	$1.7B	$1.8B	$1.5B	$1.5B	$1.7B	$1.7B	$1.9B	$1.9B	$2.2B	$2.2B	+4.3%
Operating Margin	19.8%	23.6%	23.9%	22.3%	21.1%	22.5%	23.3%	19.1%	20.4%	23.6%	20.6%	20.0%	21.5%	25.0%	22.9%	-2.1pp
Net Income	$526.2M	$546.3M	$577.4M	$588.3M	$640.3M	$939.0M	$1.2B	$1.1B	$1.1B	$1.2B	$1.3B	$1.4B	$1.3B	$1.5B	$1.6B	+2.0%
Net Margin	11.7%	12.9%	12.8%	11.8%	10.8%	12.6%	15.8%	13.8%	15.1%	16.6%	15.6%	14.7%	15.0%	17.7%	15.9%	-1.9pp
Free Cash Flow	$162.6M	$466.9M	$543.6M	$461.6M	—	$680.1M	$119.1M	$28.4M	-$183.5M	-$678.3M	-$340.0M	-$636.2M	$525.5M	$430.7M	-$1.0B	-336.5%
FCF Margin	3.6%	11.0%	12.0%	9.2%	—	9.1%	1.6%	0.4%	-2.4%	-9.4%	-4.1%	-6.6%	5.9%	5.0%	-10.4%	-15.4pp
EPS (Diluted)	$2.24	$2.35	$2.51	$2.59	$2.34	$2.96	$3.79	$3.34	$3.58	$3.79	$4.11	$4.45	$4.22	$4.83	$4.81	-0.4%

Total Debt$20.0B

Cash & Equiv.$27.6M

Net Debt$20.0B

4 min read

1. THE BIG PICTURE

WEC Energy Group is attempting a high-stakes pivot, trading its legacy coal fleet for a future built on natural gas, renewables, and the massive power demands of data centers. While its high margins and Wisconsin’s favorable "Leased Generation" laws provide a safety net, WEC Energy Group’s growth is entirely tethered to its ability to convince regulators that its multi-billion dollar spending spree is "prudently incurred" (10-K Item 1).

2. WHERE THE RISKS HIT HARDEST

WEC Energy Group’s core strength of Regulatory Certainty is directly threatened by Regulatory Rate Recovery risks. While the Leased Generation Law is designed to ensure cost recovery for new facilities, there is no guarantee that regulators will approve the full scope of these costs in retail rates; any failure to obtain full recovery would immediately impair liquidity and results of operations (10-K Item 1, 10-K Item 1A).

Furthermore, the strategic focus on Very Large Customers (VLCs), specifically data centers, is threatened by Capital Project Execution risks. WEC Energy Group is making significant infrastructure investments in natural gas and battery projects to serve these large-scale clients, but these projects are vulnerable to supply chain disruptions and potential impairment losses if the anticipated demand from these data centers fails to materialize (10-K Item 1, 10-K Item 1A).

3. WHAT THE NUMBERS SAY TOGETHER

A look across the financials reveals a business in the middle of an expensive transition. While full-year 2025 revenue grew by $1.2 billion to reach $9.8 billion, net income for the fourth quarter fell to $316.6 million from $453.5 million a year prior (8-K). This divergence was driven largely by a one-time 46-cent-per-share charge related to a regulatory settlement in Illinois (8-K).

WEC Energy Group maintains a peer-leading gross margin of 68.6% and a net margin of 16.2%, which ranks second among its closest competitors (XBRL). However, its Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin is negative at -2.3% (XBRL). While this is the "best" FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin among peers who reported the metric, it highlights the heavy capital requirements of WEC Energy Group’s Pipe Retirement Program and acquisitions like the $406.1 million Hardin III project (10-Q). Short interest stands at 5.4% of the float, suggesting a segment of the market remains wary of WEC Energy Group's ability to fund this capital plan without further earnings pressure.

4. IS IT WORTH IT AT THIS PRICE?

At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 19.1x, the market is pricing in ~2.2% long-term growth (CAPM analysis). This valuation represents a 6% premium to the peer median of 17.9x. This premium appears justified by WEC Energy Group’s superior margin profile—its 16.2% net margin is nearly double that of peers like Eversource (8.8%)—and its management's confidence in a 7% to 8% compound annual EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth rate (8-K).

However, the 19.1x multiple leaves little room for error. If regulatory friction increases or if the transition away from coal (targeted for 2032) leads to significant unrecoverable abandonment losses, the justified multiple would likely contract. For the current price to be "right," WEC Energy Group must successfully execute its $400 million+ infrastructure acquisitions while maintaining its 3.3% dividend yield, which currently sits above the 3.0% peer median (Yahoo Finance).

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin moves toward positive territory while WEC Energy Group maintains its 7% to 8% EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth guidance, signaling that the heaviest lift of the capital plan is being digested.
Cautious if the Illinois Attorney General or other state regulators initiate new proceedings against infrastructure riders, as seen in the 2025 settlement that cost WEC Energy Group 46 cents per share.

6. BOTTOM LINE

Structural Advantage: A favorable regulatory framework in Wisconsin that allows for the leasing of generation facilities to utilities, combined with a peer-leading 68.6% gross margin. Bottom Line: WEC Energy Group is a high-quality, premium-priced utility that offers a compelling growth narrative through data center expansion, provided it can navigate the regulatory minefield of rate recovery.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Regulatory Rate Recovery: WEC Energy Group’s financial condition is primarily driven by the rates it is allowed to charge; there is no assurance that regulators will deem all costs prudently incurred, and failure to obtain full recovery can lead to material adverse impacts on results of operations and liquidity.
Environmental Compliance Costs: Extensive federal and state regulations regarding air emissions, water quality, and waste management require significant capital outlays for pollution control equipment, which may not be fully recoverable through customer rates.
Climate Change and GHG Legislation: Efforts to limit greenhouse gas emissions may force the early retirement of fossil-fuel generating units, potentially leading to losses on abandonment and reduced revenues if compliance costs cannot be passed to customers.
Capital Project Execution: Large-scale infrastructure projects, including renewable energy and natural gas facilities, are subject to cost overruns, supply chain disruptions, and regulatory delays that could result in impairment charges or the loss of tax credits.
Cybersecurity and Physical Attacks: WEC Energy Group’s interconnected generation and distribution systems are vulnerable to intrusions that could disrupt operations, cause environmental damage, and result in significant reconstruction costs or legal liabilities not covered by insurance.

2. Company-Specific Risks

Wisconsin Utility Holding Company Act: The Act restricts diversification into non-utility businesses and requires PSCW approval for acquisitions of 10% or more of voting shares, which may deter potential purchasers and prevent shareholders from receiving a takeover premium.
Data Center Concentration: WEC Energy Group is investing heavily in infrastructure to serve a small number of large-scale data center customers; if these projects are canceled or demand is lower than forecasted, WEC Energy Group faces significant cancellation penalties and potential impairment losses.
Illinois Pipe Replacement Program (PRP): The ICC has directed the replacement of all cast and ductile iron pipe under 36 inches by 2035; failure to comply with this directive subjects WEC Energy Group to civil penalties under Illinois statute.
Non-Utility Renewable Basis Risk: For certain renewable projects, WEC Energy Group faces "basis risk" where price disparities between the market hub and the project location can significantly affect financial results, and hedging instruments are often unavailable or economically unfeasible.

3. Regulatory/Legal Risks

ICC Rate Orders: The ICC’s 2023 final rate order disallowed certain capital costs, leading to impairment losses for PGL and NSG and a pause in spending on the Pipe Replacement Program.
QIP Rider Reconciliation: PGL faces potential recovery issues regarding the QIP rider for 2017–2023; a proposed settlement recorded in 2025 resulted in an impairment to net property, plant, and equipment and a reduction to revenues.
Ozone Nonattainment: Southeast Wisconsin’s "serious" nonattainment status under EPA ozone standards (currently stayed pending court review) could constrain economic growth and limit WEC Energy Group's ability to obtain permits for facility expansion.
Tax Legislation: The OBBBA (enacted July 2025) modified clean-energy tax credits; WEC Energy Group faces risks if it cannot generate sufficient taxable income to use tax carryforwards or if tax benefits are disallowed, impacting earnings and cash flows.

4. Financial Impact Map

Regulatory Rate Recovery → Results of Operations and Liquidity → Rates determined by utility commissions dictate the ability to recover prudently incurred costs and earn a reasonable ROEROEReturn on Equity — net income as a percentage of shareholder equity; how efficiently a company uses the capital investors have put in.

Environmental Compliance Costs → Operating Expenses and Capital Expenditures → Costs for pollution control equipment and environmental monitoring reduce generating capacity and increase operating costs.

Climate Change and GHG Legislation → Net Property, Plant, and Equipment and Revenues → Early retirement of fossil-fuel units may lead to losses on abandonment and reduced revenues.

Capital Project Execution → Impairment Losses and Cash Flows → Failure to complete commission-approved projects or loss of PTCs/ITCs can lead to write-offs and increased debt issuance.

Cybersecurity and Physical Attacks → Maintenance Expenses and Revenues → Unplanned outages and reconstruction costs can reduce revenues and increase maintenance spending beyond insurance coverage.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025
14A	Mar 2025	—