Skip to content
drillr.ai
Sign up
ResearchTXNM

[TXNM] TXNM Energy Thesis 2026: Regulated Rate-Base Growth Meets the Blackstone Take-Private

Ddrillr ResearchOriginal research
Published 17 min read

TXNM Energy, Inc. (NYSE: TXNM) is a US regulated electric utility holding company — renamed from PNM Resources in 2024 — that owns Public Service Company of New Mexico (PNM, a New Mexico regulated vertically-integrated electric utility) and Texas-New Mexico Power (TNMP, a Texas transmission-and-distribution-only utility within ERCOT), headquartered in Albuquerque New Mexico. TXNM enters FY2026 with FY2025 revenue ~$1.9-2.2B (+3-9% YoY off ~$2.0B FY2024) and adj. EPS ~$2.65-3.15, reflecting ~$1.3-1.5B aggregate PNM revenue and ~$0.5-0.7B aggregate TNMP revenue, all under CEO Don Tarry (CEO since ~2024, ~1-2 year tenure, ~20+ year PNM/TXNM career in CFO/COO roles, who succeeded Pat Vincent-Collawn — now Executive Chair — and oversaw the 2024 rebrand to TXNM Energy and the pending Blackstone take-private). The first thesis pillar is the Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) pipeline (~$8-10B aggregate rate base growing ~9-11%+ CAGR): PNM, a New Mexico regulated vertically-integrated electric utility serving ~550,000-600,000 customers, transitioning its generation fleet off coal — having exited San Juan in 2022 with Four Corners exit around 2031 — and replacing it with solar, wind and battery storage to comply with New Mexico's Energy Transition Act (~100% carbon-free by 2040), with NMPRC and FERC rate regulation and a ~$5-6B rate base; and TNMP, a Texas T&D-only utility within ERCOT serving ~280,000-320,000 distribution customers (no generation, no commodity risk) in a fast-growing service territory (West Texas, Gulf Coast, North Texas) with population, commercial, oilfield and especially data-center/large-load interconnection demand, Texas PUC rate regulation with DCRF/TCRF interim mechanisms, and a ~$3-4B rate base growing fast; the company runs a ~$7-9B+ five-year capex plan with ~9.0-10.0% allowed ROEs targeting ~7-9% EPS growth, and FY2026 catalyst is a ~$9-11B rate base with continued PNM generation transition and TNMP load-driven T&D growth. The second pillar — the defining near-term thesis — is the Blackstone Infrastructure Take-Private pipeline: a pending acquisition announced around May 2025 at ~$61.25 per share all-cash (~$11-12B+ enterprise value including assumed debt, with no financing condition), subject to a regulatory approval path led by the NMPRC (the longest pole, requiring merger-conditions negotiation on rate credits, reliability commitments and governance — and recall the NMPRC rejected the prior Avangrid/PNM deal in 2021), plus Texas PUC, FERC, CFIUS and HSR clearances, with an expected close around 2026 on a ~12-18 month timeline; if the deal breaks, TXNM continues as a standalone regulated utility with the rate-base-growth thesis intact (~7-9% EPS growth plus dividend) — the standalone story is the downside floor — and the stock currently trades at a merger-arb spread below $61.25 reflecting regulatory and timing risk. The capital story: a ~$1.55-1.75 aggregate annual dividend per share (~2.5-3.5% yield; ~50-60% payout; quarterly; modest growth or held flat pending close), no buybacks (a capex-funding utility), ~$5-7B net debt (PNM and TNMP first-mortgage bonds plus TXNM holdco debt, with ongoing equity issuance to fund capex — or Blackstone-funded post-close), ~60-65% debt-to-total-cap, a BBB/Baa2 to BBB+/Baa1 investment-grade credit profile (with a rating-agency review tied to the Blackstone deal), ~92-95M shares and ~$0.5-1.0B liquidity. At ~$50-60 per share (a spread below the $61.25 cash price) on ~92-95M shares (~$4.7-5.7B equity, ~$11-12B+ EV) TXNM is essentially a merger-arb situation; on a standalone basis it would trade at ~15-19x P/E, ~1.5-2.2x P/BV and ~9-11x EV/EBITDA versus regulated-electric peers Pinnacle West/APS, IDACORP, Xcel Energy, Black Hills, NorthWestern Energy, Avista, Portland General Electric and the taken-private ALLETE precedent. FY2026 base case: the Blackstone deal closes at ~$61.25/share cash around 2026 after NMPRC, Texas PUC, FERC, CFIUS and HSR approvals — total return is the deal spread; standalone earnings are ~$2.85-3.40 adj. EPS with ~9-11%+ rate-base growth. Bull case: a faster/cleaner close (constructive NMPRC conditions, spread compresses quickly to $61.25) — or, standalone, an accelerating rate-base thesis (TNMP large-load interconnection adding capex, constructive NMPRC and Texas PUC rate cases, ~9-10% EPS growth, dividend growth) — drives realization at/near $61.25 or a re-rating toward ~18-20x standalone P/E. Bear case: the NMPRC rejects the deal or imposes onerous conditions (a repeat of the 2021 Avangrid outcome — the key risk — breaking or materially delaying it; the stock re-rates to the standalone DCF), Texas PUC/FERC/CFIUS delays, an extended timeline (deal-spread cost-of-carry into 2027), standalone regulatory risk (contentious NMPRC rate cases, clean-energy transition execution, interconnection queues, wildfire/drought, interest-rate headwind on the bond-proxy valuation, equity dilution, customer-affordability/rate-fatigue) and TNMP load growth not materializing drive a re-rating toward ~13-16x standalone P/E with ~$2.50-2.90 adj. EPS. The thesis depends on the Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) pipeline plus the Blackstone Infrastructure Take-Private pipeline plus the ~$8-10B rate base growing ~9-11%+ plus the PNM generation transition plus TNMP's fast-growing ERCOT T&D plus the data-center load tailwind plus the NMPRC, Texas PUC, FERC and CFIUS approvals plus the standalone-plan downside floor and Don Tarry's rate-base and Blackstone deal-close execution.

[TXNM] TXNM Energy Thesis 2026: Regulated Rate-Base Growth Meets the Blackstone Take-Private

Key Takeaways

  • TXNM FY2025 revenue ~$1.9-2.2B (+3-9% YoY) with adj. EPS ~$2.65-3.15 reflecting continued ~$1.3-1.5B aggregate PNM (Public Service Company of New Mexico — regulated electric) revenue + ~$0.5-0.7B aggregate TNMP (Texas-New Mexico Power — regulated T&D) revenue under continued CEO Don Tarry (~1-2 year tenure as TXNM CEO since ~2024; selected primary post-2024 succession from Pat Vincent-Collawn (now Executive Chair) + selected various aggregate ~~20+ year PNM Resources / TXNM career — CFO + COO background + selected primary architect of post-2024 ~rebrand from PNM Resources to TXNM Energy + the pending Blackstone Infrastructure take-private + selected various aggregate ~clean-energy transition execution).
  • Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) Pipeline (~$8-10B Rate Base): ~$8-10B aggregate rate base (selected various aggregate ~growing ~9-11%+ aggregate CAGR); selected primary PNM (selected primary ~New Mexico regulated vertically-integrated electric — ~~550,000-600,000 customers + selected various aggregate ~generation transition (selected primary ~exited San Juan coal 2022 + selected various aggregate ~Four Corners coal exit ~2031 + selected various aggregate ~replacement with solar + wind + battery storage + selected various aggregate ~Energy Transition Act compliance — ~100% carbon-free by 2040 mandate) + selected various aggregate ~transmission + distribution investment + selected various aggregate ~NM Public Regulation Commission (NMPRC) rate cases + FERC formula rates + selected various aggregate ~~$5-6B aggregate PNM rate base) + selected various aggregate TNMP (selected primary ~Texas transmission & distribution-only utility (no generation, no commodity risk) within ERCOT — ~~280,000-320,000 distribution customers + selected various aggregate ~~fast-growing service territory (selected various aggregate ~West Texas + Gulf Coast + North Texas — population + commercial + oilfield + selected various aggregate ~data-center / large-load interconnection demand) + selected various aggregate ~Texas PUC rate cases + DCRF/TCRF interim mechanisms + selected various aggregate ~~$3-4B aggregate TNMP rate base growing fast) + selected various aggregate post-2024-2025 ~capital plan execution (selected primary ~~$7-9B+ aggregate 5-year capex plan + selected various aggregate ~rate-base growth ~9-11%+ + selected various aggregate ~constructive regulatory outcomes (NMPRC + Texas PUC) + selected various aggregate ~~7-9% aggregate EPS growth target).
  • Blackstone Infrastructure Take-Private Pipeline (~$61.25/Share Cash + Regulatory Approval Catalyst): selected primary pending acquisition by Blackstone Infrastructure (announced ~May 2025; selected primary ~~$61.25 per share all-cash + selected various aggregate ~~$11-12B+ aggregate enterprise value incl. assumed debt + selected various aggregate ~~~5-15% premium to undisturbed price + selected various aggregate ~all-cash, no financing condition) + selected various aggregate ~regulatory approval path (selected primary ~NMPRC approval (New Mexico — the longest pole; merger-conditions negotiation — rate credits + reliability commitments + governance) + selected various aggregate ~Texas PUC approval + selected various aggregate ~FERC approval + selected various aggregate ~CFIUS clearance + selected various aggregate ~HSR antitrust + selected various aggregate ~expected close ~2026 (selected various aggregate ~~12-18 month timeline)) + selected various aggregate ~standalone-plan downside (selected primary ~if the deal breaks — TXNM continues as a standalone regulated utility with the rate-base-growth thesis intact + selected various aggregate ~~7-9% EPS growth + dividend) + selected various aggregate ~deal-spread / arbitrage considerations (selected various aggregate ~~stock trades at a discount to the $61.25 reflecting regulatory + timing risk).
  • Capital position + balance sheet: ~$1.55-1.75 aggregate annual dividend per share (~2.5-3.5% aggregate yield; selected primary ~~50-60% payout + selected various aggregate ~quarterly + selected various aggregate ~~modest growth — or held flat pending close) + selected various aggregate ~$0 aggregate buybacks (selected primary ~none — capex-funding utility) + aggregate net debt ~$5-7B (selected various aggregate ~PNM + TNMP first-mortgage bonds + TXNM holdco debt + selected various aggregate ~~ongoing equity needs to fund capex (selected various aggregate ~ATM / forward equity — or Blackstone-funded post-close)) + selected primary ~~60-65% aggregate debt-to-total-cap + BBB/Baa2 to BBB+/Baa1 aggregate credit profile (investment-grade; selected various aggregate ~rating-agency review on the Blackstone deal) + ~~92-95M aggregate shares.
  • FY2026 thesis catalysts: Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) pipeline (~$8-10B rate base growing ~9-11%+ + PNM generation transition off coal toward solar/wind/storage + Energy Transition Act ~100%-carbon-free-by-2040 + TNMP fast-growing ERCOT T&D + data-center / large-load demand + ~$7-9B+ 5-year capex + 7-9% EPS growth target + constructive NMPRC + Texas PUC outcomes) + Blackstone Infrastructure Take-Private pipeline ($61.25/share cash + ~$11-12B+ EV + NMPRC + Texas PUC + FERC + CFIUS + HSR approvals + expected close ~2026 + standalone-plan downside + deal-spread arbitrage) + ~$1.55-1.75 dividend + investment-grade balance sheet + Don Tarry rate-base execution + Blackstone deal-close execution.

Company Background

TXNM Energy, Inc. (NYSE: TXNM) is a US regulated electric utility holding company — renamed from PNM Resources in 2024 — that owns Public Service Company of New Mexico (PNM, a New Mexico regulated vertically-integrated electric utility) and Texas-New Mexico Power (TNMP, a Texas transmission-and-distribution-only utility within ERCOT). Selected primary ~PNM heritage to ~1917 + selected various aggregate ~PNM Resources holding-company formation ~2001 + selected post-2001-2024 ~portfolio focus on regulated utilities (selected various aggregate ~divested non-regulated generation + First Choice retail + selected various aggregate ~terminated 2020-2024 Avangrid/Iberdrola merger attempt after NMPRC rejected it) + selected post-2024 ~rebrand to TXNM Energy + selected post-2025 ~Blackstone Infrastructure take-private agreement (~May 2025). Selected ~NYSE listing as TXNM (formerly PNM); selected post-2024-2025 Don Tarry CEO era (post-2024 succession from Pat Vincent-Collawn, now Executive Chair; ~20+ year PNM/TXNM career — CFO/COO); HQ Albuquerque New Mexico; ~~1,500-2,000 employees.

TXNM operates two regulated utility segments: PNM (~65-72% revenue mix; ~$1.3-1.5B; New Mexico regulated vertically-integrated electric — ~550,000-600,000 customers; generation transition off coal toward solar/wind/storage; ~$5-6B rate base; NMPRC + FERC regulated) + TNMP (~28-35% revenue mix; ~$0.5-0.7B; Texas T&D-only utility within ERCOT — ~280,000-320,000 distribution customers; no generation, no commodity risk; fast-growing service territory — West Texas + Gulf Coast + North Texas, data-center / large-load demand; ~$3-4B rate base; Texas PUC regulated). Geographic mix: New Mexico + Texas. Pending: Blackstone Infrastructure take-private at $61.25/share cash ($11-12B+ EV).

Capital position: ~$1.55-1.75 aggregate annual dividend per share (~2.5-3.5% yield; ~50-60% payout) + ~$0 aggregate buybacks + aggregate net debt ~$5-7B + ~60-65% aggregate debt-to-total-cap + BBB/Baa2 to BBB+/Baa1 credit profile + ~92-95M aggregate shares.

Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) Pipeline (~$8-10B Rate Base)

The Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) pipeline is TXNM's foundation thesis: ~$8-10B aggregate rate base (selected various aggregate ~growing ~9-11%+ aggregate CAGR); selected primary PNM (selected primary ~New Mexico regulated vertically-integrated electric — ~~550,000-600,000 customers + selected various aggregate ~generation transition (selected primary ~exited San Juan coal 2022 + selected various aggregate ~Four Corners coal exit ~2031 + selected various aggregate ~replacement with solar + wind + battery storage + selected various aggregate ~Energy Transition Act compliance — ~100% carbon-free by 2040 mandate) + selected various aggregate ~transmission + distribution investment + selected various aggregate ~NMPRC rate cases + FERC formula rates + selected various aggregate ~~$5-6B aggregate PNM rate base) + selected various aggregate TNMP (selected primary ~Texas T&D-only utility within ERCOT — ~~280,000-320,000 distribution customers + selected various aggregate ~~fast-growing service territory (West Texas + Gulf Coast + North Texas — population + commercial + oilfield + data-center / large-load interconnection demand) + selected various aggregate ~Texas PUC rate cases + DCRF/TCRF interim mechanisms + selected various aggregate ~~$3-4B aggregate TNMP rate base growing fast) + selected various aggregate post-2024-2025 ~capital plan execution (selected primary ~~$7-9B+ aggregate 5-year capex plan + selected various aggregate ~rate-base growth ~9-11%+ + selected various aggregate ~constructive regulatory outcomes + selected various aggregate ~~7-9% aggregate EPS growth target).

FY2025 Regulated Rate-Base Growth dynamics ($8-10B aggregate rate base): selected continued post-2024 ~~$1.5-2.0B+ aggregate annual capex (selected primary ~PNM generation transition (solar + wind + storage replacing San Juan/Four Corners) + selected various aggregate ~PNM + TNMP transmission + distribution + selected various aggregate ~TNMP load-growth-driven T&D + selected various aggregate ~grid reliability/resilience) + ~$8-10B aggregate rate base + selected various aggregate ~~9-11%+ aggregate rate-base CAGR + selected various aggregate ~~9.0-10.0% aggregate allowed ROEs + selected various aggregate ~constructive NMPRC + Texas PUC outcomes + selected various aggregate ~~equity issuance to fund capex. Selected post-2024 ~$2.65-3.15 aggregate annual adj. EPS contribution as Regulated Rate-Base Growth pipeline drives the dominant regulated-utility earnings base.

FY2026 catalyst: continued Regulated Rate-Base Growth pipeline + ~$2.85-3.40 aggregate adj. EPS contribution (selected various aggregate ~~7-9% growth) under continued Don Tarry leadership (~1-2 year tenure). Selected aggregate ~$9-11B aggregate FY2026 rate base + selected various ~~9-11%+ aggregate growth + selected various aggregate ~PNM generation transition continuing + selected various aggregate ~TNMP fast-growing ERCOT T&D (selected various aggregate ~data-center / large-load interconnection — a meaningful Texas tailwind) + selected various aggregate ~~$7-9B+ aggregate 5-year capex plan + selected various aggregate ~NMPRC + Texas PUC rate cases + selected various aggregate ~constructive regulatory outcomes + selected various aggregate ~~7-9% aggregate EPS growth target + selected various aggregate ~~9.0-10.0% aggregate allowed ROEs. Risks: Pinnacle West / APS (PNW, ~$8-12B Mcap; Arizona regulated electric — neighboring) + El Paso Electric (private; ex-EE — neighboring Texas/NM) + Xcel Energy (XEL, ~$30-40B; multi-state regulated electric incl. New Mexico's SPS) + Edison International / Southern California Edison (EIX — Western utility) + PG&E (PCG — Western utility) + IDACORP (IDA, ~$5-7B; Idaho regulated electric) + NextEra / FPL (NEE — large regulated + renewables) + other regulated electric utilities + selected various aggregate regulated-utility competitive considerations (utilities don't compete for customers, but compete for capital allocation + investor attention) + regulatory risk considerations (the key risk — NMPRC has a history of contentious outcomes, including rejecting the Avangrid merger and pushing back on rate requests; Texas PUC generally constructive but ERCOT market/reliability politics are live) + clean-energy transition execution considerations (San Juan/Four Corners exits + solar/wind/storage replacement + interconnection queues + supply-chain + tax-credit (IRA) considerations) + wildfire / drought / water considerations (Western utility — wildfire liability exposure) + interest-rate considerations (utilities are rate-sensitive; higher rates raise financing cost + hurt the bond-proxy valuation) + equity-issuance dilution considerations + customer-affordability / rate-fatigue considerations + load-growth realization considerations (TNMP large-load pipeline must actually connect).

Blackstone Infrastructure Take-Private Pipeline (~$61.25/Share Cash + Regulatory Approval Catalyst)

The Blackstone Infrastructure Take-Private pipeline is TXNM's defining near-term thesis: selected primary pending acquisition by Blackstone Infrastructure (announced ~May 2025; selected primary ~~$61.25 per share all-cash + selected various aggregate ~~$11-12B+ aggregate enterprise value incl. assumed debt + selected various aggregate ~~~5-15% premium to undisturbed price + selected various aggregate ~all-cash, no financing condition) + selected various aggregate ~regulatory approval path (selected primary ~NMPRC approval (New Mexico — the longest pole; merger-conditions negotiation — rate credits + reliability commitments + governance/local-presence assurances; recall NMPRC rejected the prior Avangrid deal in 2021) + selected various aggregate ~Texas PUC approval + selected various aggregate ~FERC approval + selected various aggregate ~CFIUS clearance + selected various aggregate ~HSR antitrust + selected various aggregate ~expected close ~2026 (selected various aggregate ~~12-18 month timeline)) + selected various aggregate ~standalone-plan downside (selected primary ~if the deal breaks — TXNM continues as a standalone regulated utility with the rate-base-growth thesis intact + selected various aggregate ~~7-9% EPS growth + dividend) + selected various aggregate ~deal-spread / arbitrage considerations.

FY2025 Blackstone Take-Private dynamics: selected primary ~announced ~May 2025 + selected various aggregate ~~$61.25 per share all-cash + selected various aggregate ~~shareholder vote (selected various aggregate ~approved) + selected various aggregate ~regulatory filings (NMPRC + Texas PUC + FERC + CFIUS + HSR) + selected various aggregate ~merger-conditions negotiations (NMPRC — rate credits + commitments) + selected various aggregate ~deal trades at a ~~spread to $61.25 (selected various aggregate ~reflecting regulatory + timing risk). Selected ~the deal is the dominant equity catalyst — the stock is effectively a regulated-utility-with-an-acquisition-overlay.

FY2026 catalyst: continued Blackstone Take-Private process + selected various aggregate ~NMPRC hearing/decision (selected primary ~the gating approval — outcome + conditions matter for close timing) + selected various aggregate ~Texas PUC + FERC + CFIUS + HSR clearances + selected various aggregate ~expected close ~2026 (selected primary ~deal-spread compression toward $61.25 as approvals clear) + selected various aggregate ~deal-break downside (selected primary ~stock re-rates to standalone DCF — ~rate-base-growth + ~7-9% EPS growth + dividend; the floor is the standalone story, which is reasonably healthy) + selected various aggregate ~precedent considerations (NMPRC approved the prior El Paso Electric/IIF/JPM deal but rejected Avangrid/PNM — outcome is genuinely uncertain). Risks: NMPRC rejection or onerous conditions (the key risk — a repeat of the Avangrid outcome would break or materially delay the deal) + Texas PUC / FERC / CFIUS conditions or delays + interest-rate / private-infrastructure-capital-market considerations (Blackstone's funding) + extended timeline considerations (regulatory drag pushes close into late 2026/2027 — deal-spread cost-of-carry) + standalone-execution considerations if the deal breaks (rate cases + capex + equity needs) + activist / shareholder considerations + material-adverse-change considerations + comparison to other taken-private utilities (Allete/GIP+CPP, Minnesota Power; PNM/Avangrid failure; AES/various) + selected various aggregate ~merger-arbitrage spread considerations.

Capital Position + Balance Sheet

Capital position + balance sheet: ~$1.55-1.75 aggregate annual dividend per share (~2.5-3.5% aggregate yield; selected primary ~~50-60% payout + selected various aggregate ~quarterly + selected various aggregate ~~modest growth — or held flat pending the Blackstone close) + selected various aggregate ~$0 aggregate buybacks (selected primary ~none — capex-funding utility) + aggregate net debt ~$5-7B (selected various aggregate ~PNM + TNMP first-mortgage bonds + TXNM holdco debt + selected various aggregate ~~ongoing equity needs to fund capex (selected various aggregate ~ATM / forward equity — or Blackstone-funded post-close)) + selected primary ~~60-65% aggregate debt-to-total-cap + BBB/Baa2 to BBB+/Baa1 aggregate credit profile (investment-grade; selected various aggregate ~rating-agency review tied to the Blackstone deal — could be affirmed, watch, or modestly adjusted depending on the post-close capital structure) + ~~92-95M aggregate shares + weighted average debt maturity ~~8-12 years + selected various aggregate ~~$0.5-1.0B aggregate liquidity (revolvers + cash).

FY2026 catalyst: continued dividend (~$1.55-1.75 aggregate annual; selected various aggregate ~~modest growth or flat pending close) + selected continued ~$0 aggregate buybacks + selected various aggregate ~~$1.5-2.0B+ aggregate annual capex funding (selected primary ~debt + equity — or Blackstone-provided equity post-close) + selected various aggregate ~~60-65% aggregate debt-to-total-cap + selected various aggregate ~debt refinancing/maturity management + selected continued BBB/Baa2 to BBB+/Baa1 credit profile (selected various aggregate ~outcome dependent on the Blackstone deal — infrastructure-fund owners often run utilities with somewhat higher leverage, but regulators police that). Selected dividend + selected investment-grade balance sheet + selected ~equity-funded capex support the rate-base-growth plan — whether TXNM stays public or closes into Blackstone Infrastructure.

Key Core Metrics

  • FY2025 revenue ~$1.9-2.2B (+3-9% YoY) vs ~$2.0B FY2024; adj. EPS ~$2.65-3.15
  • 2 regulated segments: PNM 65-72% ($1.3-1.5B; New Mexico regulated vertically-integrated electric — ~550,000-600,000 customers; generation transition off coal; ~$5-6B rate base; NMPRC + FERC) + TNMP 28-35% ($0.5-0.7B; Texas T&D-only within ERCOT — ~280,000-320,000 distribution customers; no generation/commodity risk; fast-growing territory; ~$3-4B rate base; Texas PUC)
  • Aggregate rate base: ~$8-10B FY2025 (growing ~9-11%+ aggregate CAGR)
  • 5-year capex plan: ~$7-9B+ aggregate
  • EPS growth target: ~7-9% aggregate
  • Allowed ROEs: ~9.0-10.0% aggregate
  • PNM generation transition: exited San Juan coal 2022; Four Corners coal exit ~2031; replacement with solar + wind + battery storage; NM Energy Transition Act ~100% carbon-free by 2040
  • TNMP load growth: West Texas + Gulf Coast + North Texas; data-center / large-load interconnection demand (a Texas tailwind)
  • PENDING: Blackstone Infrastructure take-private at ~$61.25/share cash; ~$11-12B+ EV; announced ~May 2025; expected close ~2026; subject to NMPRC + Texas PUC + FERC + CFIUS + HSR approvals
  • Standalone downside if deal breaks: rate-base-growth thesis intact (~7-9% EPS growth + dividend)
  • Aggregate net debt: ~$5-7B (PNM + TNMP first-mortgage bonds + TXNM holdco debt)
  • ~60-65% aggregate debt-to-total-cap; BBB/Baa2 to BBB+/Baa1 aggregate credit profile (investment-grade; rating-agency review tied to the Blackstone deal)
  • ~92-95M aggregate shares; ~$0.14-0.16B total dividends FY2025
  • Dividend: ~$1.55-1.75 aggregate annual per share (~2.5-3.5% yield; ~50-60% payout; quarterly; modest growth or flat pending close)
  • No buybacks (capex-funding utility); ongoing equity issuance to fund capex (or Blackstone-funded post-close)
  • ~$0.5-1.0B aggregate liquidity (revolvers + cash)
  • ~1,500-2,000 employees
  • Don Tarry CEO since ~2024 (~1-2 year tenure; ~20+ year PNM/TXNM career — CFO/COO); Pat Vincent-Collawn Executive Chair
  • HQ Albuquerque New Mexico; PNM heritage to ~1917; renamed from PNM Resources to TXNM Energy 2024

Market Evaluation

TXNM FY2026 market evaluation: at ~$50-60 share price (selected various aggregate ~trading at a ~spread below the $61.25 Blackstone cash price reflecting regulatory + timing risk) + ~92-95M aggregate shares = ~$4.7-5.7B equity market cap; ~$11-12B+ aggregate enterprise value (incl. ~$5-7B net debt + the Blackstone deal value). Selected primary TXNM peers: Pinnacle West Capital / APS (PNW, ~$8-12B Mcap; Arizona regulated electric) + IDACORP (IDA, ~$5-7B; Idaho regulated electric) + Xcel Energy (XEL, ~$30-40B; multi-state regulated electric incl. New Mexico SPS) + Black Hills (BKH, ~$3-5B; multi-state regulated electric + gas) + NorthWestern Energy (NWE, ~$3-4B; Montana/South Dakota regulated) + Avista (AVA, ~$2-4B; Pacific Northwest regulated) + Portland General Electric (POR, ~$4-5B; Oregon regulated electric) + ALLETE (ALE — taken private by GIP/CPP; Minnesota Power — a precedent comp for the Blackstone deal) + other regulated electric utilities + selected various aggregate regulated-utility companies. Selected TXNM valuation is essentially the Blackstone deal: ~$61.25/share cash → the stock trades at a merger-arb spread; on a standalone basis ~15-19x P/E (regulated electric utility with PNM New Mexico vertically-integrated + TNMP fast-growing Texas T&D + ~$8-10B rate base growing ~9-11%+ + ~7-9% EPS growth + ~2.5-3.5% dividend yield + clean-energy transition + data-center load tailwind) + selected ~1.5-2.2x P/BV + selected ~~9-11x EV/EBITDA + ~2.5-3.5% dividend yield + selected aggregate ~$2.0-2.3B aggregate FY2026 revenue + selected aggregate ~$2.85-3.40 aggregate FY2026 adj. EPS + selected aggregate Regulated Rate-Base Growth + Blackstone Infrastructure Take-Private pipeline. FY2026 base case: the Blackstone deal closes at ~$61.25/share cash (~2026; after NMPRC + Texas PUC + FERC + CFIUS + HSR approvals) — total return = the deal spread; standalone earnings ~$2.85-3.40 adj. EPS + ~9-11%+ rate-base growth. Bull case: the deal closes faster / cleaner than expected (constructive NMPRC conditions; spread compresses quickly to $61.25) — or, if standalone, the rate-base-growth thesis accelerates (TNMP large-load interconnection adds meaningful capex + constructive NMPRC + Texas PUC rate cases + ~9-10% EPS growth + dividend growth) drives realization at/near $61.25 (deal) or a re-rating toward ~18-20x standalone P/E. Bear case: NMPRC rejects the deal or imposes onerous conditions (a repeat of the 2021 Avangrid outcome — the key risk — would break or materially delay the deal; the stock re-rates down to the standalone DCF) + Texas PUC / FERC / CFIUS delays + extended timeline (deal-spread cost-of-carry into 2027) + standalone regulatory risk (contentious NMPRC rate cases + clean-energy transition execution + interconnection queues + wildfire/drought + interest-rate headwind on the bond-proxy valuation + equity dilution + customer-affordability/rate-fatigue) + load-growth not materializing at TNMP drives a re-rating toward ~13-16x standalone P/E + ~$2.50-2.90 adj. EPS. The thesis depends on the Regulated Rate-Base Growth (PNM New Mexico + TNMP Texas) pipeline + the Blackstone Infrastructure Take-Private pipeline + ~$8-10B rate base growing ~9-11%+ + PNM generation transition + TNMP fast-growing ERCOT T&D + data-center load tailwind + NMPRC + Texas PUC + FERC + CFIUS approvals + the standalone-plan downside floor + Don Tarry rate-base execution + Blackstone deal-close execution.