We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Spire (SR) to Gain From Investments and Cost Management
Read MoreHide Full Article
Spire’s (SR - Free Report) benefits from systematic investments will enhance the reliability of operations, which will allow it to meet the rising demand from an expanding customer base. It is inclined toward utilizing technologies for advancing operations to improve its services and reduce costs, which will improve the company’s overall performance.
However, this Zacks Rank #3 (Hold) company faces risks related to cyber securities and extreme climatic conditions.
Tailwinds
Spire has a capital investment plan of $7.2 billion for 2024-2033 to strengthen its existing operations. More than 86% of the planned investment is focused on Gas Utility infrastructure upgrades, new business and advanced meter installations.
For the fiscal year 2023-2024, the company invested $290 million in upgrades of pipeline infrastructure and an additional $110 million to connect more homes and businesses to provide reliable and affordable natural gas service. SR expects this systematic investment to drive 7-8% rate base and 5-7% earnings per share growth over the long term.
The company also invested millions of dollars in purchasing and installing advanced meters this year. Spire continues to install ultrasonic meters across utilities to improve the customer experience. The company has been registering a consistent increase in the average number of gas utility customer volumes over the past few years as it launched the Innovation Center with the objective of serving customers more efficiently.
Spire signed an agreement in May 2023 worth $175 million with CorEnergy Infrastructure Trust to acquire MoGas Pipeline, an interstate natural gas pipeline, and Omega Pipeline, a connected gas distribution system. This deal was closed in January 2024. The deal fits in Spire’s existing midstream businesses as it bolsters resiliency and helps expand its footprint in Missouri.
The usage of new technology by the company not only assists it in improving services but also helps it lower operating costs, thereby benefiting customers.
Headwinds
Spire’s operations are subject to cyber-attacks, which might cause a loss or misuse of confidential information. Such risks include breaches of security pertaining to sensitive customer, employee and vendor information, along with any breach in the technology.
Any loss could adversely impact the company’s financial position or operations. SR depends on its suppliers to meet the requirements of its customers. If its contracted gas suppliers fail to meet their obligations or interstate pipeline or storage services are not available, the company might fail to fulfill its customer’s natural gas requirements in a timely manner.
American Water Work’s long-term (three to five years) earnings growth rate is 7.76%. The Zacks Consensus Estimate for AWK’s 2024 EPS indicates an increase of 6.12% from the previous year’s reported number.
DTE Energy’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS implies an improvement of 16.93% from that recorded in 2023.
MDU Resources Group’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS calls for a decline of 0.67% from the previous year’s reported number.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Spire (SR) to Gain From Investments and Cost Management
Spire’s (SR - Free Report) benefits from systematic investments will enhance the reliability of operations, which will allow it to meet the rising demand from an expanding customer base. It is inclined toward utilizing technologies for advancing operations to improve its services and reduce costs, which will improve the company’s overall performance.
However, this Zacks Rank #3 (Hold) company faces risks related to cyber securities and extreme climatic conditions.
Tailwinds
Spire has a capital investment plan of $7.2 billion for 2024-2033 to strengthen its existing operations. More than 86% of the planned investment is focused on Gas Utility infrastructure upgrades, new business and advanced meter installations.
For the fiscal year 2023-2024, the company invested $290 million in upgrades of pipeline infrastructure and an additional $110 million to connect more homes and businesses to provide reliable and affordable natural gas service. SR expects this systematic investment to drive 7-8% rate base and 5-7% earnings per share growth over the long term.
The company also invested millions of dollars in purchasing and installing advanced meters this year. Spire continues to install ultrasonic meters across utilities to improve the customer experience. The company has been registering a consistent increase in the average number of gas utility customer volumes over the past few years as it launched the Innovation Center with the objective of serving customers more efficiently.
Spire signed an agreement in May 2023 worth $175 million with CorEnergy Infrastructure Trust to acquire MoGas Pipeline, an interstate natural gas pipeline, and Omega Pipeline, a connected gas distribution system. This deal was closed in January 2024. The deal fits in Spire’s existing midstream businesses as it bolsters resiliency and helps expand its footprint in Missouri.
The usage of new technology by the company not only assists it in improving services but also helps it lower operating costs, thereby benefiting customers.
Headwinds
Spire’s operations are subject to cyber-attacks, which might cause a loss or misuse of confidential information. Such risks include breaches of security pertaining to sensitive customer, employee and vendor information, along with any breach in the technology.
Any loss could adversely impact the company’s financial position or operations. SR depends on its suppliers to meet the requirements of its customers. If its contracted gas suppliers fail to meet their obligations or interstate pipeline or storage services are not available, the company might fail to fulfill its customer’s natural gas requirements in a timely manner.
Stocks to Consider
Some better-ranked stocks from the same sector are American Water Works (AWK - Free Report) , DTE Energy (DTE - Free Report) and MDU Resources Group (MDU - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Water Work’s long-term (three to five years) earnings growth rate is 7.76%. The Zacks Consensus Estimate for AWK’s 2024 EPS indicates an increase of 6.12% from the previous year’s reported number.
DTE Energy’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for DTE’s 2024 EPS implies an improvement of 16.93% from that recorded in 2023.
MDU Resources Group’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for MDU’s 2024 EPS calls for a decline of 0.67% from the previous year’s reported number.