Valued at a market cap of $14.1 billion, NiSource Inc. (NI) is an energy holding company and together with its subsidiaries provides natural gas and electricity. The Merrillville, Indiana-based company operates in two segments: Gas Distribution Operations and Electric Operations.
Shares of this electric and gas utility company have underperformed the broader market over the past 52 weeks. NI has gained 17.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.7%. But in 2024, things are looking up - NI’s stock is up 19.1%, surpassing SPX's 12.1% rise on a YTD basis.
Zooming in further, NI has outperformed the DWA Utilities Momentum Invesco ETF’s (PUI) 13.8% gain over the past 52 weeks and 15.5% return on a YTD basis.
Shares of NiSource rose marginally on Aug. 7 because the company exceeded Q2 profit estimates due to lower fuel costs, which reduced overall operating expenses. Despite a decline in operating revenue and a weather-related impact, NiSource reaffirmed its full-year profit forecast, which helped support investor confidence. The company’s outperformance so far this year is driven by its commitment to growth, with a focus on expanding its rate base and transitioning to renewable energy sources.
For the current fiscal year, ending in December, analysts expect NI’s EPS to grow 7.5% year over year to $1.72. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Wall Street is highly optimistic about NI stock, unanimously rating it as a "Strong Buy" based on 11 analyst recommendations.
The configuration is slightly more bullish than three months ago, with 10 analysts suggesting a “Strong Buy.”
On Aug. 9, BMO Capital Markets maintained an “Outperform” rating on NiSource and raised the price target to $34 - the street-high price target, noting the company’s better-than-expected Q2 earnings report. This implies a potential upside of 7.7% from the current price levels.
The mean price target of $32.75 represents a premium of 3.8% to NI’s current levels.
On the date of publication, Sohini Mondal did not have (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. For more information please view the Barchart Disclosure Policy here.
