On August 5, Black Hills Corp. (NYSE:BKH) reported second-quarter results and reaffirmed its full-year earnings guidance, giving investors a rare moment of clarity in a stock that has spent the year waiting on a merger decision. Adjusted earnings per share climbed to $0.54 from $0.38 a year earlier, and the company held its 2026 adjusted EPS guidance at $4.25 to $4.45. Behind the steady numbers sits a company juggling a pending acquisition, a wave of rate cases, and a data center customer that keeps asking for more power.
Data Centers Come Calling
The clearest growth story sits in Wyoming, where Wyoming Electric logged four new all-time peak loads so far in 2026, most recently 439 megawatts on July 20, up 16% from the 379-megawatt peak set a year earlier on June 20, 2025. That extends 20 consecutive years of rising electric demand in the Cheyenne region, and the company points to large-load data center customers as the driver. Black Hills says it has more than 3 gigawatts of large-load demand in its Wyoming pipeline, with 600 megawatts already built into its financial plan through 2030 from Microsoft’s expanding operations and a new Meta AI data center.
A separate 1.8-gigawatt data center project in Cheyenne is still under negotiation, but the customer’s commitment has only grown: refundable advances tied to securing generation equipment rose from $285 million to $377 million in July, with the agreement now running through August 31. On the income statement, new rates and rider recovery tied to the completed Ready Wyoming project pushed Electric Utilities operating income up $12.1 million for the quarter. The dividend keeps climbing too. In July, the board approved a $0.703 quarterly payout, extending the increase streak to 56 straight years, a mark topped by only one other utility in the sector.
Growth Comes With A Price Tag
That growth is not free. Net interest expense rose to $51.6 million in the quarter from $48.9 million a year earlier as new debt funds the buildout, and depreciation climbed to $75.3 million from $69.8 million as new assets came online. Year-to-date revenue actually slipped to $1,233.5 million from $1,244.2 million, with the company citing $0.18 per share of drag from mild weather across its territories. The pending merger with NorthWestern Energy, announced August 19, 2025, is adding its own cost and uncertainty: merger-related expenses cut $0.04 per share from quarterly results and $0.10 per share year to date, and the Corporate and Other segment’s operating loss widened by $5.2 million in the quarter largely because of it.
Every other approval is already in hand, but the deal still needs sign-off from the Montana Public Service Commission before it can close, expected by the end of 2026. Meanwhile, Wyoming Electric’s own resource plan flagged a near-term capacity shortfall of 95 megawatts starting in 2027, which the utility plans to fill with new gas-fired engines and battery storage, more capital spending stacked on an already heavy load. And the company keeps leaning on new stock to help pay for it: it issued $50 million worth of shares so far this year, pushing diluted shares outstanding to 76.1 million from 72.4 million a year earlier.
What The Market Is Pricing In
Hedge fund ownership dipped from 37 funds to 36 in the most recent quarter, a modest pullback rather than a rush for the exits. As of September 3, the stock trades at a forward price-to-earnings ratio of 15.43, a fairly modest multiple for a regulated utility with a data center growth story attached. Short interest tells a different story, sitting at 16.57% of the float, a level that reflects real organized skepticism rather than routine hedging.
A Utility At A Turning Point
Black Hills enters the back half of 2026 with reaffirmed guidance, a growing data center pipeline, and a merger one approval away from closing. The bull case rests on whether Wyoming’s large-load demand keeps converting into signed contracts rather than advance payments. The bear case rests on whether rising financing and depreciation costs, plus continued share issuance, erode the earnings growth that new rates are producing. Montana’s decision on the NorthWestern merger stands as the nearest catalyst either way.
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