On Monday, NiSource (NYSE:NI) shares saw an adjustment in their price target, as analysts at Jefferies increased it to $43.00, up from the previous $39.00, while reiterating a Buy rating on the stock. Currently trading at $37.76, the stock is approaching its 52-week high of $38.83 and has delivered an impressive 51.56% return over the past year. According to InvestingPro data, analyst targets for NiSource range from $35 to $43, with a strong consensus recommendation of 1.5 (between Strong Buy and Buy). The analysts are anticipating a significant update by mid-2025 regarding a critical datacenter, which they believe could be the next major step in the company's earnings per share (EPS) growth, contingent on the outcome of commercial contract negotiations.
The forthcoming update is expected to cover NiSource's recent regulatory successes and a discussion on Northern Indiana Public Service Company's (NIPSCO) declination filing. This filing is a notable move that seeks to bypass traditional ratebase recovery for datacenter generation, aiming to accelerate construction and provide a clear division of cost allocation.
The analysts at Jefferies have expressed a bullish stance, noting that their expectations remain higher than the consensus on Wall Street. They have reiterated their Buy rating, signaling confidence in NiSource's potential for growth and financial performance. The company has maintained dividend payments for 39 consecutive years, currently offering a 2.97% yield. InvestingPro analysis indicates that NiSource is trading above its Fair Value, with a P/E ratio of 22.6x.
NiSource's strategic decisions, such as the declination filing by NIPSCO, are part of the company's efforts to navigate the regulatory landscape efficiently and enhance their operational capabilities. The update expected by mid-2025 will likely provide investors with greater clarity on the company's trajectory and its impact on the EPS.
Overall, the price target increase by Jefferies reflects a positive outlook on NiSource's future, particularly regarding its datacenter initiatives and regulatory strategies. The analysts emphasize their position remains well above the average market expectations, underlining a strong conviction in the company's value proposition to its shareholders. For a deeper understanding of NiSource's valuation and prospects, InvestingPro subscribers can access comprehensive Pro Research Reports, which provide detailed analysis of the company's financial health (currently rated as FAIR) and growth potential, along with 8 additional exclusive ProTips.
In other recent news, NiSource Inc. has been making significant strides in its financial performance. The utility company's third-quarter adjusted earnings per share (EPS) reached $0.20, outperforming estimates. NiSource also reaffirmed its full-year earnings guidance, projecting $1.70 to $1.74 per share, and provided an initial forecast for 2025, estimating EPS in the range of $1.84 to $1.88.
Analysts from Citi and BMO Capital Markets have both revised their price targets for NiSource, with Citi raising its target to $36 and BMO to $38. These adjustments follow NiSource's announcement of a substantial increase in capital expenditures from $1.6 billion to $2.9 billion, a figure that does not include potential growth from the datacenter segment, which is still under negotiation.
NiSource has also granted a $2 million stock award to Executive Vice President, Michael Luhrs, consisting of 52,938 restricted stock units set to vest over a three-year period. This move demonstrates NiSource's commitment to incentivizing and retaining key leadership within the organization. These recent developments indicate NiSource's strategic focus on growth and operational efficiency.
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