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On Monday, UBS analyst Ross Fowler reaffirmed a Buy rating and a $45.00 price target for NiSource (NYSE:NI), which is currently trading near its 52-week high of $41.45. According to InvestingPro data, the stock has delivered an impressive 49.63% return over the past year, though it appears slightly overvalued at current levels. Fowler’s commentary focused on the Northern Indiana Public Service Company (NIPSCO) 2024 Integrated Resource Plan (IRP), which anticipates a significant increase in demand from large load customers, projecting up to 2.6 gigawatts (GW) by 2035. The upper end of their sensitivity analysis suggests this could potentially reach 8.6GW by the same year. With a market capitalization of $18.81 billion and a P/E ratio of 24.55, NiSource has maintained dividend payments for 39 consecutive years, demonstrating consistent shareholder returns.
NiSource, in its initial declination application with the Indiana Utility Regulatory Commission (IURC), pointed out that several customers are in search of hundreds of megawatts (MW) of power, with some individual customers requiring over 1GW. The application’s approval is seen as a catalyst for the company’s long-term earnings growth, as it could lead to multiple project announcements.
The analyst at UBS highlighted the company’s potential to drive longer-term earnings through the proposed structure outlined in the declination application. The optimism is based on the significant customer demand for power, which, if met, could bolster NiSource’s growth prospects. InvestingPro subscribers can access detailed financial health scores and additional insights, with 8 more exclusive ProTips available for this utility giant.
NiSource, through its subsidiary NIPSCO, has been engaging with the IURC to outline the demand and supply dynamics expected in the coming years. The company’s strategic focus on meeting the growing energy needs of its large load customers is central to its forward-looking plans.
The UBS analyst’s reiterated Buy rating and price target reflect confidence in NiSource’s ability to capitalize on these opportunities and expand its earnings capacity. The IURC’s decision on the declination application will be a key determinant in the company’s ability to fulfill these large customer demands and achieve the growth trajectory outlined in the IRP. Analyst consensus remains bullish, with targets ranging from $35 to $48.15, as revealed in the comprehensive Pro Research Report available on InvestingPro.
In other recent news, NiSource Inc. reported its fourth-quarter 2024 earnings, revealing revenue that exceeded expectations, reaching $2.13 billion against a forecast of $1.75 billion. However, the company’s earnings per share (EPS) fell short, posting $0.49 compared to the anticipated $0.53. Despite this mixed earnings result, NiSource plans a significant capital expenditure of $19.4 billion over the next five years, aiming for an annual EPS growth rate of 6% to 8%. Jefferies analyst Julien Dumoulin-Smith raised the price target for NiSource shares to $44 from $43, maintaining a Buy rating, citing a positive outlook for 2025 and beyond.
The analyst highlighted NiSource’s consistent rate base growth and potential opportunities in data centers, which could enhance the company’s valuation. Additionally, NiSource has increased its annualized dividend to $1.12 per share, reflecting a year-over-year adjusted EPS increase of 9.4% for 2024. The company projects an adjusted EPS range of $1.85 to $1.89 for 2025, supported by its strategic investments and operational improvements. NiSource’s focus on infrastructure development and regulatory recovery positions it strongly in the utility sector, according to the company’s leadership.
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