CMS Energy Corporation (CMS), headquartered in Jackson, Michigan, operates as an energy company that provides electricity and natural gas to its customers. Valued at $20.6 billion by market cap, the company also invests in and operates non-utility power generation plants in the U.S. and abroad.

Shares of this leading energy company have underperformed the broader market over the past year. CMS has gained 22% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.3%. In 2025, CMS stock is up 3.2%, compared to the SPX’s 4% rise on a YTD basis. 

Narrowing the focus, CMS’ underperformance is also apparent compared to the Utilities Select Sector SPDR Fund (XLU). The exchange-traded fund has gained about 31.2% over the past year. Moreover, the ETF’s 4.5% gains on a YTD basis outshine the stock’s returns over the same time frame.

CMS is grappling with meeting environmental regulations regarding carbon emissions, despite its implementation of pollution-control measures in power generation facilities. With a substantial portion of its electricity still sourced from coal, the company is facing considerable expenses in managing the disposal of coal ash. The persistent problem is casting doubt on the company's ability to meet environmental standards and perform effectively in this regard. 

On Feb. 6, CMS shares closed up more than 1% after reporting its Q4 results. Its adjusted EPS came in at $3.34, rising 7.4% year over year. The company’s revenue was $2 billion, missing Wall Street forecasts of $2.1 billion. CMS expects full-year adjusted EPS in the range of $3.54 to $3.60.

For fiscal 2025, ending in December, analysts expect CMS’ EPS to grow 7.5% to $3.59 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.

Among the 18 analysts covering CMS stock, the consensus is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, and nine “Holds.”

This configuration is less bullish than two months ago, with 10 analysts suggesting a “Strong Buy.”

On Feb. 7, Evercore ISI analyst Durgesh Chopra maintained a “Hold” rating on CMS with a price target of $73, implying a potential upside of 6.1% from current levels.

The mean price target of $72.76 represents a 5.7% premium to CMS’ current price levels. The Street-high price target of $78 suggests an upside potential of 13.4%.