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Spire (SR) to Gain From Investments and Expanding Customer Base
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Spire (SR - Free Report) benefits from its investments to strengthen and expand its operations, which will enable Spire 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 failure to fulfill its customer’s natural gas requirements.
Tailwinds
Spire invested $663 million in fiscal 2023 and plans to spend $765 million in fiscal 2024. More than 86% of the planned investment is focused on Gas Utility infrastructure upgrades, new businesses and advanced meter installations. 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.
Spire has a capital investment plan of $7.2 billion for 2024-2033 to strengthen its existing operations. SR expects this systematic investment to drive a 7-8% rate base and 5-7% earnings per share growth over the long term. The company has been registering a consistent increase in the average number of gas utility customers over the past few years.
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.
Headwinds
Spire’s operations are subject to cyberattacks, 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 Works, Unitil and TransAlta delivered an average earnings surprise of 6.04%, 12.76% and 142.57%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2024 earnings per share of American Water Works, Unitil and TransAlta has moved up 1%, 0.3% and 16.3%, respectively, in the past 60 days.
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Spire (SR) to Gain From Investments and Expanding Customer Base
Spire (SR - Free Report) benefits from its investments to strengthen and expand its operations, which will enable Spire 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 failure to fulfill its customer’s natural gas requirements.
Tailwinds
Spire invested $663 million in fiscal 2023 and plans to spend $765 million in fiscal 2024. More than 86% of the planned investment is focused on Gas Utility infrastructure upgrades, new businesses and advanced meter installations. 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.
Spire has a capital investment plan of $7.2 billion for 2024-2033 to strengthen its existing operations. SR expects this systematic investment to drive a 7-8% rate base and 5-7% earnings per share growth over the long term. The company has been registering a consistent increase in the average number of gas utility customers over the past few years.
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.
Headwinds
Spire’s operations are subject to cyberattacks, 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) , Unitil (UTL - Free Report) and TransAlta (TAC - 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 Works, Unitil and TransAlta delivered an average earnings surprise of 6.04%, 12.76% and 142.57%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2024 earnings per share of American Water Works, Unitil and TransAlta has moved up 1%, 0.3% and 16.3%, respectively, in the past 60 days.