5 Utility Stocks Poised to Outperform Q2 Earnings Estimates

These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Major Catalysts Shaping Utility Stocks’ Q2 Performance

Utilities are expected to have benefited from rising electricity demand, driven by the rapid expansion of AI-powered data centers, growing consumption from commercial and industrial customers, and the reshoring of manufacturing activities amid geopolitical uncertainty. These trends are likely to have supported revenue growth in the upcoming quarter.

Utility companies continue to benefit from favorable factors such as higher electricity rates, strategic acquisitions, disciplined cost-management initiatives and the expansion of energy-efficiency programs. Ongoing investments in grid resilience to withstand extreme weather events, coupled with the increasing adoption of cost-effective renewable energy resources, are also expected to have supported overall performance.

Utilities have been steadily deploying smart meters, expanding transmission and distribution infrastructure, undergrounding lines impacted by weather and enhancing grid maintenance to improve operational efficiency, strengthen customer service and optimize grid management. These investments are expected to reduce operating costs while supporting long-term revenue growth.

Improving economic activity across utilities' service territories has been driving higher demand for electricity, providing further support for revenue growth and overall financial performance. Adoption of cost efficiency measures, use of new technology, low interest rates and new electric and water rates might have benefited the performance of the utilities.

Utility Stocks Positioned for Strong Earnings Performance

Ameren generates and distributes electricity and natural gas to residential, commercial, industrial and wholesale customers across Missouri and Illinois. Its ongoing investments in growth initiatives, infrastructure modernization and renewable energy are expected to enhance service reliability while supporting long-term earnings growth. Ameren plans to invest $31.8 billion in the 2026-2030 period to strengthen its electric transmission, distribution and generation infrastructure.

The Zacks Consensus Estimate for its second-quarter earnings is pegged at $1.08 per share, indicating an increase of 6.93% from the year-ago reported figure. AEE currently has an Earnings ESP of +0.19% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Edison International generates and distributes electricity across a roughly 50,000-square-mile service territory spanning Southern, Central and coastal California, serving residential, commercial, industrial, agricultural, public-sector and other customers. The company aims to invest $38-$41 billion during 2026-2030 to strengthen its infrastructure.

The Zacks Consensus Estimate for its second-quarter earnings is pegged at $1.02 per share, indicating an increase of 5.15% from the year-ago reported figure. EIX currently has an Earnings ESP of +4.66% and a Zacks Rank #2. 

Southwest Gas is a regulated utility providing natural gas services and operates a pipeline transmission system through its wholly owned subsidiary, Paiute Pipeline Company. The company benefits from strong economic growth across its service areas. SWX expects a capital investment of $6.3 billion in 2026-2030, which includes nearly 73% related to it and 27% related to the Great Basin project.

The Zacks Consensus Estimate for its second-quarter earnings is pegged at 47 cents per share, indicating a decline of 11.32% from the year-ago reported figure. SWX currently has an Earnings ESP of +5.64% and a Zacks Rank #2. 

The Southern Company deals with the generation, transmission and distribution of electricity.  The company's less-volatile, recession-proof business model presents a unique opportunity to earn high returns. Southern Company’s prospective pipeline exceeds 75 gigawatts of potential large-load projects, while 23 gigawatts are already contracted or in advanced stages. The company expects a capital investment of $78.1 billion in the 2026-2030 period to further strengthen its operations.

The Zacks Consensus Estimate for its second-quarter earnings is pegged at $1.01 per share, indicating an increase of 10.99% from the year-ago reported figure. SO currently has an Earnings ESP of +1.16% and a Zacks Rank #3. 

Vistra is an integrated power company operating in competitive U.S. markets, supplying electricity and natural gas to residential, commercial and industrial customers, while managing a diversified generation fleet that supports and hedges its retail operations. Long-term contracts with high-quality partners strengthen stability. 

The Zacks Consensus Estimate for its second-quarter earnings is pegged at $2.41 per share, indicating an increase of 138.61% from the year-ago reported figure. VST currently has an Earnings ESP of +19.75% and a Zacks Rank #3. 

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research