On Thursday, BMO Capital Markets adjusted its outlook for NiSource Inc (NYSE:NI) shares, increasing the utility company's price target to $31 from the previous $30, while maintaining an Outperform rating.
The revision follows NiSource's first-quarter earnings for 2024, which surpassed both BMO's and the consensus estimates, with an adjusted earnings per share (EPS) of $0.85 compared to the expected $0.83.
NiSource's management confirmed their 2024 adjusted EPS guidance, projecting figures between $1.70 and $1.74, aligning with BMO's and the consensus estimate of $1.73 and $1.72, respectively. The company also reiterated its forecast for 6-8% adjusted EPS growth, underpinned by an 8-10% rate base growth target through 2028.
The company has updated its capital expenditure program for the years 2024 to 2028, increasing the budget by $400 million to a total of $16.4 billion. This adjustment was made to accommodate the complete acquisition costs of the Fairbanks and Gibson Solar projects, as reflected in the updated Certificates of Public Convenience and Necessity (CPCNs).
BMO Capital Markets has reaffirmed its positive stance on NiSource, citing the company's robust growth outlook and recent financial performance. The new price target of $31 reflects a revision based on peer multiples and the company's latest financial projections and strategic investments.
InvestingPro Insights
NiSource Inc (NYSE:NI) appears to be in a strong position following its first-quarter earnings beat for 2024, with BMO Capital Markets raising its price target. InvestingPro Data shows a market capitalization of $12.87 billion and a P/E ratio of 18.85, which aligns with the company's solid performance. Despite a decrease in revenue growth over the last twelve months, NiSource maintains a high gross profit margin of 49.22%, indicating efficient operations. The company's dividend yield stands at an attractive 3.69%, with a consistent history of dividend growth, up 6.0% from the previous year.
InvestingPro Tips suggest that while NiSource operates with a significant debt burden, it has raised its dividend for 7 consecutive years, showcasing a commitment to returning value to shareholders. However, analysts have revised their earnings downwards for the upcoming period, which could be a point of concern for potential investors. The stock is also trading near its 52-week high, with a price 98.42% of this peak, suggesting investor confidence.
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