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Investing.com -- NiSource Inc. (NYSE:NI) shares fell 6% Thursday following news that two of the five Indiana utility commissioners and the rate pay advocate are stepping down.
The sell-off came as Citigroup analyst Ryan Levine suggested these regulatory changes could potentially delay the company’s application to spin off Genco, a subsidiary focused on data center power. Levine maintained a neutral rating and $44 price target on NiSource stock.
According to Levine, the Genco spinoff would be a key catalyst for NiSource’s stock performance. However, the changes at the Indiana Utility Regulatory Commission (IURC) initiated by the state’s governor increase the risk of timeline extensions, modifications, or even rejection of the application.
Despite these concerns, the analyst still believes the likelihood of the Genco application being successful remains above 50%, though approval in September now appears less certain due to the regulatory shakeup.
The Indiana regulatory changes come at a critical time for NiSource as it seeks to restructure its business through the Genco spinoff, which would allow the company to focus on its core utility operations while creating a separate entity dedicated to data center power solutions.
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