DULUTH – Allete Inc. had been riding high in the months leading up to the pandemic — 2019 saw record profits for the Duluth-based energy company, and the stock price had reached new highs after a steady yearslong climb.
On Tuesday that momentum continued to stumble as the stock price neared a 12-month low even as CEO Bethany Owen assured investors the company will find its way through the global crisis.
"We at Allete have successfully navigated previous downturns during more than a century of operations," Owen said at Tuesday's virtual annual shareholder meeting.
Coming off a strong start to the year, Allete, the parent company of Minnesota Power, faces an uncertain path through the pandemic. The company withdrew its 2020 earnings guidance earlier this month and joined a group of other large utilities asking state regulators to track COVID-19 expenses and losses for potential recovery later.
Allete's value has dropped from $4.19 billion at the start of the year to a market capitalization of $2.72 billion at the end of trading Tuesday.
CFRA Research has issued a hold recommendation for the company's shares.
"Although we see good fundamentals and expect continued growth in the clean energy business, we see caution signs for the industrial segment," Andrzej Tomczyk, an equity analyst at CFRA, wrote in a statement last week.
Despite Iron Range mine shutdowns — Minnesota Power sells more than half of its electricity to a handful of large industrial customers — the company doesn't expect a financial impact until after August, when large power users submit their production levels for the remainder of the year.
