CenterPoint Energy, Inc. (CNP) Stock Analysis
Score DCompounder · Grade F · Bullish
$42.42
$55.15
+30.0%
0/10
F
Compounder
Investment Thesis
Low quantitative score: Low quality, stretched valuation, or poor risk/reward.
For New Investors
Quantitative score: weak
For Current Holders
Quantitative score: low
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $55.15 (+30.0%). Significantly undervalued. (Fair value adjusted: model estimate was outside reasonable range.)
PEG-Based EPS
$55.15
FCF DCF Model
$55.15
EV/EBITDA
$55.15
Blended Fair Value
$55.15
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
39/120 points
Low Quality
ROE (3Y Avg)
9.5%
ROIC-WACC Spread
-0.7%
D/E Ratio
2.1x
Current Ratio
0.9x
Interest Coverage
2x
FCF Positive Years
0/3
Quality Flags
- ROIC spread: -0.7pp (got 0/25 pts)
- FCF positive only 0/3 years (0/20 pts)
- Leverage: D/E 2.1x (4/15 pts)
- Interest coverage: 2.3x (7/10 pts)
- Liquidity: Current Ratio 0.91 (8/10 pts)
- Volatile gross margins: std dev 6.5pp (need <3.0pp)
Market Sentiment
Wall Street Consensus
$44.00
+3.7% Upside
16 analysts
Range: $37.00 — $49.00
Rating: Buy
Our model is more cautious than Wall Street.
Trend & Technical
Price ($42.40) is 6.2% above SMA 200 ($39.93). Bullish trend confirmed.
Tech Score 73/100 — Strong technical setup. Trend, momentum, and positioning aligned bullish.
Risk & Reward
Asymmetry Ratio
1.16:1
Expected Return
-3.1%
Bull Upside
+28.9%
Bear Downside
-25.0%
Poor asymmetry: 1.16:1 ratio. Risk exceeds potential reward.
Verdict: Unfavorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of CNP?
Based on our multi-method conviction analysis, the estimated fair value of CenterPoint Energy, Inc. (CNP) is $55.15. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is CNP a buy, sell, or hold?
CNP currently has a AVOID rating with a conviction score of 0/10. Low quantitative score: Low quality, stretched valuation, or poor risk/reward. Quantitative score: weak.
Is CNP a high-quality stock?
CenterPoint Energy, Inc. has a quality grade of F (39/120 points), rated as Low Quality. Key metrics include ROE of 9.5%, ROIC-WACC spread of -0.7%, and D/E ratio of 2.1x.
What type of stock is CNP?
CNP is classified as a "compounder" in our framework. High P/E: 26.0x, Mature growth: -1.1%, High debt: D/E 2.1x, Dividend paying: 2.1%, Consistent FCF: 3/3 years positive
What do Wall Street analysts say about CNP?
16 Wall Street analysts have a consensus price target of $44.00 for CNP, representing +3.7% upside. Targets range from $37.00 to $49.00. The consensus recommendation is "Buy". Our model is more cautious than Wall Street.
What are the risks of investing in CNP?
The risk/reward asymmetry ratio for CNP is 1.16:1, rated as Unfavorable. Poor asymmetry: 1.16:1 ratio. Risk exceeds potential reward. The expected return is -3.1%, with bull case upside of +28.9% and bear case downside of -25.0%.
What is the current trend for CNP?
CNP is in a bullish trend. Price ($42.40) is 6.2% above SMA 200 ($39.93). Bullish trend confirmed. The technical score is 73/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.