NiSource Inc. Outshines Peers with Strong Performance and Positive Outlook
With a market cap of $16.8 billion, NiSource Inc. (NI) is a prominent provider of regulated natural gas and electric services in the U.S. Headquartered in Merrillville, Indiana, the company serves millions through its extensive gas distribution network and electric generation facilities, primarily across the Midwest and Northeast.
Stock Performance Exceeds Expectations
Shares of this energy holding company have done well compared to the broader market in the past 52 weeks. NI has increased by 43.8%, while the S&P 500 Index ($SPX) has gained 35.5%. In 2024 alone, NI shares are up 35.4%, outpacing SPX’s 25.5% rise year-to-date (YTD).
Robust Gains Compared to Utilities
Diving deeper, NiSource has also surpassed the performance of the Utilities Select Sector SPDR Fund’s (XLU) 30.1% return over the last year and a YTD return of 23.9%.
Mixed Q3 Results But Optimistic Outlook
On October 30, NiSource reported lower-than-expected Q3 revenue of $1.1 billion. However, shares of NI rose 2.1% after the company posted an adjusted EPS of $0.20, beating expectations. Investors took comfort in NiSource’s reaffirmed 2024 EPS guidance of $1.70–$1.74, which aligns with analyst estimates. The firm is projecting a 6%-8% CAGR through 2029 alongside an increased capital expenditure plan of $19.3 billion for 2025–2029. Additionally, growth in gas distribution and electric sales showed the company’s solid performance in its core areas.
Analysts Forecast Continued Growth
For the current fiscal year ending in December, analysts anticipate NI’s EPS will grow 8.1% year-over-year to reach $1.73. Historically, the company has exceeded consensus estimates in the last four quarters, instilling confidence in its performance.
Analyst Sentiment Remains Strong
Among the 14 analysts covering the stock, the consensus rating is a “Strong Buy,” reflecting increased optimism compared to three months ago, with 11 ratings upgraded to “Strong Buy.”
Jefferies Analyst Initiates Coverage with Positive Outlook
On October 29, Jefferies analyst Julien Dumoulin-Smith initiated coverage of NiSource with a “Buy” rating and set a $39 price target. He highlighted the strong potential for re-rating driven by over $10 billion in capital expenditure opportunities from data center and renewable expansions, particularly in states with favorable regulations.
The average price target of $38.04 suggests a modest premium of 5.8% over NI’s current trading levels, while the highest price target of $40 indicates a potential upside of 11.3% from the present price.
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On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. To view more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
