US Utilities: 2025 Q4

Morningstar

Travis Miller, Andrew Bischof

Research

24 Pages

Morningstar explains why utilities finished 2025 as a market leader and why the setup could stay supportive in 2026. The paper argues the rally is more about growth expectations than rate relief, which is unusual for a traditionally defensive sector. A key pressure point is whether regulators keep backing large investment plans as customer bills stay sensitive.

Date published: December 2025

Source: Morningstar. Data as of Dec. 8, 2025.
Source: Morningstar. Data as of Dec. 8, 2025.

Key Takeaways

Rally needs follow through: Future upside depends on utilities delivering growth investors are already pricing in.
Valuation still matters: Shares look closer to fair value, reducing the margin for operational mistakes.
Regulation is the gate: Investment driven earnings require political support and rate designs that protect customer affordability.
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