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On Tuesday, Mizuho (NYSE:MFG) Securities showed continued confidence in NiSource Inc. (NYSE: NYSE:NI), as analyst Gabriel Moreen increased the company’s price target from $42.00 to $44.00, while keeping an Outperform rating on the stock. The new target sits well within the broader analyst range of $35.00 to $48.15, with the stock currently trading at $39.61. Moreen highlighted the solid jurisdictions that support the company’s earnings growth, which is expected to be at the high end of NiSource’s 6-8% target range. The analyst also pointed to balance sheet improvements as a positive factor. According to InvestingPro data, NiSource has demonstrated strong momentum with a remarkable 51.68% return over the past year.
The Indiana-based company, with a market capitalization of $18.59 billion, is anticipated to benefit from load growth related to data centers, which Moreen sees as a significant upside. Over the next approximately six months, key catalysts are expected to emerge. These include developments in NIPSCO GenCo’s regulatory filing, potential disclosures of counterparties behind the approximately 2,600MW of anticipated load growth, and a possible increase in NiSource’s ’upside financial plan’. InvestingPro analysis reveals that NiSource has maintained dividend payments for 39 consecutive years, with 8 consecutive years of dividend increases, demonstrating strong financial stability.
Moreen’s report took a comprehensive look at data center development across Indiana and considered the debate over whether NiSource will raise its earnings growth target. This discussion follows the ’above and beyond’ returns related to NIPSCO GenCo, which were discussed in the company’s fourth-quarter 2024 earnings call. However, any announcement regarding an increase in the earnings growth target is not expected until October. For deeper insights into NiSource’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
The price target increase to $44.00 reflects an update in numbers and a rise in the target price-to-earnings ratio to 20 times, up from 19.5 times. Currently trading at a P/E ratio of 24.26x, the stock appears to be trading at a premium to Moreen’s target multiple. This adjustment accounts for what Moreen describes as NiSource’s premium attributes, which justify a higher valuation. The Outperform rating indicates that Mizuho Securities believes NiSource stock will perform better than the overall market or its sector in the near future.
In other recent news, NiSource Inc. reported its fourth-quarter 2024 earnings, revealing a revenue of $2.13 billion, which exceeded analyst expectations of $1.75 billion. However, earnings per share (EPS) fell short, coming in at $0.49 compared to a forecast of $0.53. The company maintains a positive outlook, projecting an annual EPS growth rate of 6% to 8% and planning significant capital expenditures of $19.4 billion over five years. Jefferies analyst Julien Dumoulin-Smith raised the price target for NiSource shares to $44, citing the company’s earnings beat and strong future prospects. UBS analyst Ross Fowler reaffirmed a Buy rating and a $45 price target for NiSource, highlighting the company’s potential for long-term earnings growth based on increased demand from large load customers. NiSource’s strategic focus on expanding its data center infrastructure in Northern Indiana is seen as a key growth driver. The Indiana Utility Regulatory Commission’s decision on NiSource’s declination application will be crucial for the company’s ability to meet customer demands and achieve its growth objectives.
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