Duke Energy Stock Surges on Takeover Talks

Sentiment surrounding Duke has been bearish of late

Digital Content Manager

Sep 30, 2020 at 10:40 AM

The shares of Duke Energy Corp (NYSE:DUK) are up 6.3% at $87.60 this morning, amid reports that power producer NextEra Energy (NEE) has made a takeover offer. According to a report from the Wall Street Journal, Duke Energy rebuffed its approached, though NextEra is still interested in pursuing a deal. Neither company has chosen to comment.

A look at the charts shows DUK chopping lower since its pre-pandemic peak in February, rejected several times by its 200-day moving average. Today, however, the security is making another attempt to close north of this trendline, while also knocking out recent pressure at its 160-day. The stock was down 9.6% for the year, coming into today.

Analysts are lukewarm on the stock, with just four calling it a "strong buy," compared to seven that say "hold." On the other hand, the 12-month consensus price target of $92.50 is a healthy 12.2% premium to last night's close.

Short sellers, meanwhile, are slowly exiting their positions. Short interest fell 0.5% in the last two reporting periods. The 36.50 million shares sold short still make up 5% of DUK's available float, and would take almost 11 days to cover at the stock's average pace of trading. This could set the stock up for a short squeeze, should more of these bears hit the exits.

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