BMO Raises Black Hills Price Target to $86 on Google Deal

BMO Capital raised its price target on Black Hills Corp shares to $86 from $83, maintaining an Outperform rating in response to a newly announced data center agreement with Google.

The upward revision highlights growing financial links between regulated utility providers and large-scale artificial intelligence infrastructure, driven by multi-decade power purchase agreements that guarantee steady revenue streams.

"The revised price target reflects a base case $1.35 contribution to Black Hills' standalone outlook discounted back from 2030, with BMO noting an upside surprise in free cash flow generation," according to an Investing.com report.

Long-Term Cheyenne Data Center Contract

Under the terms of the agreement, Black Hills will supply energy to Google's planned data center facility located in Cheyenne, Wyoming according to the report. The definitive contracts establish an operational timeline effective from September 30, 2026, running through 2048.

Long-term power contracts of this scale provide utilities with predictable demand profiles, offsetting capital expenditure costs required to expand regional transmission and generation assets.

Dividend History and Financial Context

Black Hills has maintained a consistent capital return policy, raising its dividend for 55 consecutive years per the Investing.com data.

The integration of major technology tenants into traditional utility service territories has emerged as a primary catalyst for equity research analysts evaluating regulated electric and gas providers, altering projected cash flow profiles across the sector.