CMS Energy Corporation

Strong reaffirmed earnings outlook + introduced 2027 guidance (predictability intact) - 1H 2026 adjusted EPS: $1.50 vs. $1.73 prior-year (≈$0.23 unfavorable YoY), driven mainly by 2025 liability-management benefits already planned/absorbed into 2026 and storm impacts. - Full-year 2026 adjusted EPS guidance reaffirmed: $3.83–$3.90; company expects to land toward the high end. - New full-year 2027 guidance (introduced today): $4.08–$4.17, consistent with 6%–8% long-term growth off 2025 actuals (i.e., no “rebase,” utility-driven growth outlook maintained).

NorthStar restructuring: simplifying and shifting growth to the regulated utility (high-quality earnings mix) - Company plans to exit nonutility renewable development and reposition NorthStar after a strategic review. - What they keep (key Michigan assets): DIG (Dearborn Industrial Generation), small gas peakers (4-related), and 4 commercial solar projects in Michigan. - Capital reallocation: current 5-year plan includes ~$1.7B primarily dedicated to nonutility renewables; shifting away reduces parent capital burden. - Funding improvement: expects $500M+ reduction in funding through 2030 (via reduced NorthStar parent funding needs + cash flow from retained assets + proceeds from sale of non-Michigan development/assets). - Post-2027 earning composition: management expects nearly 100% of earnings and future growth to be rate-based driven within the utility, increasing earnings quality and simplifying the story.

Storms are the near-term earnings headwind; they’re actively planning offsets - 1H headwind vs plan: storm activity produced an unfavorable O&M variance (storm-driven) and weather-related effects. - Mitigation lever: management cites a pending storm deferral filing and expects a constructive outcome; additionally, they plan normalized storm activity for the remainder of the year. - 2H 2026 planning assumption highlights (from their walk/bridge): - Rates net of investment costs: +~$0.22 EPS - O&M benefit: +~$0.25 EPS (including constructive storm deferral docket outcome + normalization) - Remaining “to-go” items: +~$0.16–$0.23 EPS (no pull-aheads, NorthStar performance contribution, conservatism on non-weather sales).