JPMorgan thinks a new slate of regulation will weigh on Xcel Energy despite the utility’s exposure to a transition toward clean energy. The bank downgraded Xcel Energy to neutral from overweight Friday, with a new $68 per share price target reduced from $79. JPMorgan’s new forecast equates to 7% upside from the stock’s $63.55 close on Thursday. XEL YTD mountain Xcel Energy stock has pulled back about 9.4% so far in 2023. Analyst Jeremy Tonet thinks Xcel Energy, a large provider of electricity and natural gas concentrated in western and midwestern states, faces headwinds thanks to a decision from the Minnesota public utilities commission to raise electricity rates by roughly half of what the company had expected. The commission’s increase amounts to 9.25% return on equity, the note said, which is below the firm’s expectation of roughly 9.6%. “The company currently carries a top +13.5% P/E premium across our regulated coverage, which leaves little room for the regulatory risk now highlighted by the commission’s order,” Tonet said. “We expect this outcome and heightened market attention on the CO electric rate case to weigh on XEL for now mirroring reactions over the past nine months to varying levels of surprise in the rate case arena.” Still, JPMorgan thinks Xcel’s exposure to the transition toward clean energy bodes well for the company’s future, given the growth opportunities available thanks to the spark of interest and investment in renewables. “Overall, XEL remains an attractive regulated story with exposure to energy transition themes across generation and transmission, which underpins an extended growth runway into the next decade,” Tonet said. — CNBC’s Michael Bloom contributed to this report.