A Fresh Look at Northwest Natural (NWN) Valuation After Recent Share Price Gains

Northwest Natural Holding (NWN) shares have risen about 8% over the past month, reflecting solid investor interest. The company's recent performance offers insights for those tracking utilities with steady earnings and moderate long-term returns.

See our latest analysis for Northwest Natural Holding.

Northwest Natural Holding’s share price has gained real momentum this year, up nearly 13% year-to-date. This climb builds on a 17% total shareholder return over the past twelve months, suggesting confidence in its stable outlook along with some renewed optimism following recent gains.

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But with shares trading at a discount to analyst price targets, yet after a substantial run-up, investors face a critical question: does Northwest Natural still offer upside, or is future growth already fully reflected in the stock?

Most Popular Narrative: 14.2% Undervalued

Northwest Natural Holding’s widely followed narrative sets its fair value at $52, comfortably above its recent close at $44.61. This gap highlights why many believe the market is still missing key upside drivers in the story.

Diversification through renewable projects and water utilities enhances earnings stability and regulatory alignment. Modernizing infrastructure also boosts operational efficiency.

Read the complete narrative.

Want to know what’s driving this bullish fair value? The narrative leans on a future profit outlook and rapid expansion into new sectors. Curious how ambitious earnings forecasts and game-changing margin projections factor into the analyst consensus? The full narrative reveals the financial leaps they’re expecting. Get the details before the market catches on.

Result: Fair Value of $52 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as increased electrification or regulatory shifts could slow customer growth and challenge earnings. This could potentially put the bullish narrative at risk.

Find out about the key risks to this Northwest Natural Holding narrative.

Another View: Testing with the SWS DCF Model

While analysts see upside using future earnings multiples, our DCF model paints a more cautious picture. The SWS DCF estimate puts fair value at $41.57 per share, just below today’s price. This suggests growth might already be priced in. Which approach will prove more accurate?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Northwest Natural Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Northwest Natural Holding Narrative

If this perspective doesn't align with your own, or if you like to dig into the numbers yourself, you can craft a personal view in just minutes. Do it your way

A great starting point for your Northwest Natural Holding research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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