Benzinga | Nov 16, 2021 12:02PM EST

Analyst Upgrades Idacorp: 'Organic Growth With A Crypto Mining Kicker'

IDACORP Inc (NYSE:IDA) shares traded higher Tuesday after one analyst upgraded the stock and said it has a rare set of growth catalysts within the utility sector.

The Idacorp Analyst: Bank of America analyst Julien Dumoulin-Smith upgraded Idacorp from Neutral to Buy and raised the price target from $108 to $123.

Related Link: 5 Top Shiba Inu Cryptocurrencies From Best To Worst: Dogecoin, Floki And More

The Idacorp Thesis: In the upgrade note, Dumoulin-Smith said Idacorp has "best-in-cass organic revenue growth with a crypto mining kicker."

Idaho Power has received 1,950MW of serious inbound crypto mining requests, the company reported at Bank of America's recent Edison Electric Institute Financial Conference. Dumoulin-Smith said that demand is significant given Idaho Power's record peak demand of 3,751MW in summer 2021.

At an estimated $4/MWh margin, Dumoulin-Smith said even 10% of that 1,950MW in requests could boost Idacorp's EPS by between 1% and 2%. He noted that Idacorp could be one way for investors to gain diversified exposure to cryptocurrency mining.

He said cryptocurrency mining could prove to be a differentiating factor for utility investors, especially on top of Idacorp's attractive 3% customer growth rate. The company is also investing in other attractive clean energy initiatives that could lure ESG investors. Dumoulin-Smith said these unique attributes suggest Idacorp shares deserve to trade at a valuation premium to utility peers.

"Idacorp has a strong set of thematically positive transmission, renewables, and hydro investments which are attractive on their own but could be further fast-tracked/supported by federal infrastructure legislation pending," he said.

IDA Price Action: Idacorp shares were trading 1.69% higher at $106.37 midday Tuesday.

Benzinga's Take: Idacorp is a relatively stable utility sector investment that trades at a reasonable valuation and pays a 2.8% dividend. Investors would be hard pressed to find many other plays on cryptocurrency mining in today's market that share any of those attributes.