Ameren Corporation

▲ Bull Case

• ◆Full 3 GW data center energization by FY2028: Construction agreements convert at 100%, Missouri electricity sales grow 7%+/yr, rate base accelerates to $35B+ by FY2029. EPS reaches $7.00–7.50 by FY2029; stock re-rates to 22x on premium-growth utility designation → $143+/share.
• ◆Illinois ROE improvement: ICC approves formula rate update at 9.25–9.50% in FY2028+ multi-year plan; Illinois segment stops being a drag and adds 15–20bps to blended ROE spread → +$5–8/share incremental.
• ◆Rate multiple expansion: As AI/data center electricity demand becomes consensus utility theme, the market awards AEE WEC-level P/E (20–22x) as a 'rate base compounder with secular tailwind.' Re-rating from 16x to 20x alone = +$25/share at current EPS.

▼ Bear Case

• ◆Data center load conversion disappoints: Only 30–40% of construction agreements energize by FY2028 (hyperscaler capex pullback; permitting/interconnection delays; technology efficiency reducing per-unit power demand). Missouri electricity sales growth reverts to 1–2%/yr sector norm. EPS grows only 3–4%/yr; stock stays at 16x → $75–85/share; stagnation, not collapse.
• ◆Interest rate headwind: 10-year Treasury sustains at 5.0–5.5%; utility P/E multiples compress to 14–16x sector-wide; AEE's 16.3x current multiple falls to 15x on $5.25 EPS = $79/share. Total return would be modestly negative but dividend (3.3%) provides a partial offset.
• ◆Missouri rate case disappointment: Next case delivers only $250–275M (vs. $330M+ guidance) as consumer advocates argue prior AEE overearning (FY2025 earned ROE 14.6% vs. authorized 9.74%) warranted conservative treatment. EPS guidance range narrows; stock de-rates → $82/share bear.

“The core debate is whether AEE's 3 GW data center construction agreement pipeline is a real, near-term earnings catalyst or multi-year optionality that is perpetually '18 months away.' Bulls argue construction agreements are legally binding commitments from creditworthy hyperscalers; AEE is already spending capital to serve them (Q1 2026 CapEx +48% YoY); Missouri's Large Load Customer Rate Plan provides a dedicated regulatory recovery track; and the 5.5% electricity sales CAGR is already reflected in AEE's own guidance. Bears counter that construction agreements have historically converted at 60–80% rates; the AI infrastructure buildout could be front-loaded then slow; self-generation/co-location alternatives could reduce grid dependency; and the load may arrive in FY2029–2030 rather than FY2027–2028. Analyst consensus (~$108–115 target) assumes 70–80% conversion at 18–19x P/E, consistent with the base case. The main variant between analysts is whether the 22x 'data center premium' multiple is warranted now or only upon load confirmation.”

• ◆First Q-report showing connected data center load > 0 MW energized (Q3–Q4 2026) — HIGH magnitude, +15–25% potential
• ◆Missouri rate case filing and settlement (Q4 2026–Q2 2027) — HIGH magnitude, ±10–20%
• ◆Q2/Q3 2026 EPS trajectory confirmation of FY2026 $5.75E guidance — MEDIUM magnitude
• ◆Illinois ICC 2027 multi-year rate plan ROE decision — MEDIUM magnitude, ±5%
• ◆Analyst P/E re-rating from sector median to data center premium (triggered by load energization) — HIGH magnitude, +20–30%
• ◆Q1 2026 CapEx spike normalization in Q2–Q3 2026, removing equity dilution overhang — LOW-MEDIUM magnitude

• ◆Data center load conversion disappointment (<50% of 3 GW energized by FY2028) — 20–25% probability; -$10–20/share
• ◆Missouri PSC adverse rate case outcome — 10–15% probability; -$10–15/share
• ◆Interest rate spike (10-yr Treasury > 5.5%) compressing utility P/E multiples — 15–20% probability; -$8–15/share
• ◆Equity dilution accelerating above 3.5%/yr sustained — 25–30% probability at that level; -$2–5/share at base dilution
• ◆Illinois ROE sustained at 8.72% or reduced below 8.0% through 2028+ — 40% probability of no change (already in base); reduction below 8% would be incremental negative
• ◆Coal stranded asset disallowance — 5–10% probability; -$5–10 one-time