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Edward Jones has reaffirmed its Buy rating on shares of NiSource (NYSE: NYSE:NI), a fully regulated utility company.
The firm's endorsement of NiSource's stock is based on the company's business model, which operates mainly in states that provide supportive utility regulation.
Edward Jones anticipates NiSource is approaching a phase of increased earnings growth, which supports its positive outlook on the stock.
NiSource's operations within a regulated environment are a key factor that Edward Jones believes warrants a higher market valuation for the company compared to its utility peers.
The firm's analysis suggests that the regulatory framework in the states where NiSource operates is conducive to the company's business stability and potential for growth.
The utility company's prospective earnings expansion is seen as a pivotal element contributing to Edward Jones' Buy rating. The firm's outlook indicates confidence in NiSource's ability to leverage its regulated business model to achieve higher earnings in the foreseeable future.
Edward Jones' position on NiSource reflects a broader assessment of the company's financial health and strategic positioning. The firm's commentary underscores a belief in the inherent value of NiSource's operational approach and the anticipated benefits that this could deliver to shareholders.
In other recent news, NiSource saw its shares target upgraded to $36 by BMO Capital, following a favorable settlement agreement related to Columbia Gas of Pennsylvania.
The agreement allows for a net rate increase of approximately $74 million, which is expected to positively impact the company's financials. BMO Capital's decision was based on a mark-to-market of peer group multiples, indicating a positive outlook on the stock's performance.
NiSource also recently closed a $500 million debt offering in the form of Fixed-to-Fixed Reset Rate Junior Subordinated Notes. This issuance will provide financing for general corporate purposes, including capital expenditures and debt repayment. The underwriters for this offering included BofA Securities, Goldman Sachs, and J.P. Morgan Securities.
In terms of earnings, NiSource reported Q2 2024 results that exceeded expectations. The company also completed approximately $500 million of its 2024 equity issuance plan and projects a 6% to 8% adjusted EPS growth and 8% to 10% rate base growth from 2023 to 2028. Additionally, NiSource announced a quarterly dividend of $0.265 per share.
InvestingPro Insights
As NiSource (NYSE:NI) navigates a phase of anticipated earnings growth, real-time data from InvestingPro offers additional insights. The company's market capitalization stands at $15.28 billion, reflecting its significant presence in the utility sector. Despite a challenging environment with a revenue decline of 10.42% over the last twelve months as of Q2 2024, NiSource maintains a robust gross profit margin of 51.05%, underscoring its operational efficiency.
InvestingPro Tips highlight the company's commitment to shareholder returns, as NiSource has raised its dividend for 8 consecutive years and maintained dividend payments for 38 consecutive years. This consistent return to shareholders is complemented by a dividend yield of 3.11% as of the last dividend ex-date on July 31, 2024. On the performance front, NiSource's stock has seen a strong return over the last three months, with a 22.41% price total return, and is trading near its 52-week high, at 98.78% of the peak price.
For investors looking for further guidance, additional InvestingPro Tips are available, offering a comprehensive view of NiSource's financials, market performance, and analyst predictions. With these insights and the analysis provided by Edward Jones, investors can make more informed decisions regarding NiSource's stock.
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