Xcel Energy's (XEL) top quartile earnings-per-share growth of more than 9%, along with future catalysts, should strengthen valuation, UBS Securities said in a note Tuesday.

UBS said its three-year EPS growth estimate remains in-line with guidance but incorporates most of the company's five-year $7 billion equity issuance guidance and assumes return on equity will be lower than the five-year average.

The brokerage said catalysts for Xcel include additional generation of 1.5GW in Colorado, approval of the Woodmere-Crawfish Draw 765 kilovolts line in Southwest Power Pool and a potential settlement of the Colorado rate case ahead of June 11 hearings.

Meanwhile, concerns about wildfire risks and regulatory overhangs from pending rate cases have weighed on shares but UBS believes those risks are largely discounted.

The brokerage maintained a buy rating on Xcel and lowered the price target to $89 from $93.

Price: 78.40, Change: +1.45, Percent Change: +1.88