MGE Energy (MGEE): Where the Data Centers Have No Name: Durable Base Growth Balanced By Limited Large-Load Visibility and Premium Valuation; Initiate at Neutral

We initiate coverage of MGE Energy, Inc. (MGEE) with a Neutral rating and $76 YE 2027 price target. We view MGEE as a high-quality, relatively low-risk vertically integrated utility offering durable single-digit earnings growth, supported by constructive PSCW ratemaking, an established WI clean energy policy, and a resilient, recession-resistant Madison service territory. Although management does not provide formal long-term guidance, MGEE's historical earnings/net PP&E growth track record provides a credible framework for future execution, with renewables, grid modernization, LDC, and transmission investment supporting a visible multi-year runway. However, we believe the current valuation already captures much of MGEE's business quality, while the scope and scale of prospective large load development and corresponding capex torque appear relatively limited versus VIU peers at this time. With shares trading at an above-average PEGY ratio, we see balanced risk-reward from current levels