On Friday, BMO Capital Markets revised its price target for shares of NiSource Inc. (NYSE:NI), a leading utility company, to $34.00, up from the previous target of $33.00, while maintaining an Outperform rating. The adjustment follows NiSource's reported earnings for the second quarter of 2024, which surpassed expectations. The company also confirmed that it remains on track with its full-year and long-term financial goals.
NiSource's recent financial achievements include the successful completion of approximately $500 million, or roughly 83%, of its equity issuance plan for 2024 through forward sale agreements within the first half of the year. The company's second-quarter performance was characterized as uneventful, with the earnings call primarily focusing on future plans and growth opportunities.
During the call, attention was directed to various scenarios that may affect generation requirements, stemming from stakeholder discussions in anticipation of NiSource's subsidiary NIPSCO's Integrated Resource Plan (IRP) filing. Additionally, the potential for load growth driven by data center developments and economic expansion was highlighted, along with the possible effects on customer billing and rate design.
The analyst from BMO Capital underscored their confidence in NiSource's outlook by reiterating the Outperform rating. The revised price target of $34 reflects a mark-to-market update, signaling the firm's positive stance on the company's stock performance and future prospects.
In related news, NiSource Inc. has disclosed its financial results from the second quarter of 2024, reporting an adjusted earnings per share (EPS) of $0.21. The energy holding company also reaffirmed its full-year EPS guidance of $1.70 to $1.74. In addition to these financial updates, NiSource has emphasized its strategic growth initiatives, forecasting a 6% to 8% adjusted EPS growth and 8% to 10% rate base growth from 2023 to 2028.
A key part of NiSource's growth strategy involves pursuing data center development opportunities in Indiana. The company also plans to issue up to $600 million of at-the-market (ATM) equity in 2024 to strengthen its financial standing. As part of its commitment to transition to renewable energy, NiSource is investing in solar projects and power purchase agreements.
Despite potential challenges such as increased financing costs and regulatory outcomes, NiSource remains optimistic about the potential for load growth, especially from data centers. The company is also exploring partnerships and economic development opportunities, including supplying gas to data centers.
InvestingPro Insights
Following BMO Capital Markets' updated price target for NiSource Inc. (NYSE:NI), InvestingPro data provides a deeper look into the company's financial health and stock performance. With a market capitalization of $14.05 billion and a P/E ratio standing at 18.54, NiSource presents a stable investment profile. The company's revenue for the last twelve months as of Q2 2024 was reported at $5.24 billion, with a notable gross profit margin of 51.05%, underscoring its efficiency in managing costs relative to its revenue.
An InvestingPro Tip highlights NiSource's track record of raising its dividend for 7 consecutive years, indicative of the company's commitment to returning value to shareholders. This is further reinforced by the company's dividend yield of 3.41% as of the latest data, coupled with a dividend growth of 6.0% over the last twelve months. Additionally, NiSource has maintained dividend payments for an impressive 38 consecutive years, showcasing its financial resilience and reliability as an income-generating stock.
Investors should note that NiSource is trading near its 52-week high, at 96.54% of this peak, which may signal confidence in its current valuation and future potential. For those interested in exploring more about NiSource, InvestingPro offers additional tips, with further insights available at https://www.investing.com/pro/NI.
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