NI: Equity Offering And GenCo Approval Will Shape Balanced Future Outlook

Analysts have modestly raised their price target on NiSource, increasing estimated fair value by about $0.56 per share to approximately $46.36. They cited expectations for slightly stronger profit margins that more than offset tempered revenue growth assumptions and a marginally higher forward earnings multiple.

What's in the News

• NiSource filed a new at-the-market follow-on equity offering authorization of up to $1.5 billion in common stock, expanding its capacity to raise capital as needed (company filing).
• The company completed a follow-on equity offering totaling $852.5 million in common stock across multiple tranches, with shares priced around $40.1 per share after discount, which the company stated would strengthen its balance sheet and fund growth (company filing).
• NiSource secured Indiana Utility Regulatory Commission approval for its NIPSCO Generation LLC (GenCo) declination petition, enabling a separate entity to own and operate generation assets tailored to fast-growing data center and large-load demand in Northern Indiana (Indiana Utility Regulatory Commission).
• According to the company, GenCo’s structure is intended to shield existing NIPSCO retail customers from cost impacts tied to new data center customers while supporting growth, financial stability, and flexibility in future energy market conditions (company statement).

Valuation Changes

• The Fair Value Estimate has risen slightly from about $45.80 to approximately $46.36 per share, reflecting modestly more optimistic expectations.
• The Discount Rate is effectively unchanged, edging down only fractionally from roughly 6.96 percent to 6.96 percent, indicating a stable risk and funding cost outlook.
• The Revenue Growth Assumption has fallen moderately from about 4.58 percent to roughly 3.88 percent annually, signaling more conservative views on top line expansion.
• The Net Profit Margin Expectation has increased slightly from roughly 16.20 percent to about 16.62 percent, implying improved operating efficiency and cost discipline.
• The Future P/E Multiple has risen marginally from approximately 23.84 times to about 24.01 times forward earnings, suggesting a modestly higher valuation applied to projected profits.