Morgan Stanley cut its price target on Dominion Energy to $68 from $69 on April 21 and kept an Overweight rating on the utility. Even after the trim, the new target still pointed to almost 9% upside from current levels.
The move came after Dominion Energy generated first power last month from its Coastal Virginia Offshore Wind project, a 2.6 gigawatt development that is the largest offshore wind project in the United States and is expected to supply clean energy to 660,000 customers. The project marks a milestone for a company that provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina and South Carolina, along with regulated natural gas service to 500,000 customers in South Carolina.
Dominion Energy also generates around 40% of its energy from nuclear power facilities, a profile that has helped keep it in the conversation among investors looking for dividend-oriented utilities. The stock comes into the latest call after the utilities sector surged 16.4% in March, outpacing the S&P 500's 9.6% gain in the same month.
The tension for Dominion is that the wind project is now producing power after years of delay, but investors are still being asked to judge the payoff before the project reaches full scale. Morgan Stanley's smaller target cut suggests the bank sees less room for appreciation than before, even as it keeps a bullish stance on the shares.
For Dominion, the next question is not whether the project matters; it is how quickly first power turns into steady output and returns that can justify the buildout.
