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NiSource (NI) Rides on Infrastructure Upgrade & Clean Assets
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NiSource Inc.’s (NI - Free Report) consistent investments to strengthen its existing infrastructure, stable returns from regulated assets and cost-saving initiatives should boost its earnings. The company’s focus on clean energy helps to enhance its overall performance.
However, this Zacks Rank #3 (Hold) company faces risks related to any delay in the completion of projects and weather fluctuations.
Tailwinds
NiSource is working on a long-term utility infrastructure modernization program. The company expects investments in the range of $3.3-$3.5 billion for 2024. It also projected an investment of $16.4 billion during 2024-2028.
NiSource has $2.1 billion of additional investment opportunities through 2028, which is not included in the base plan. These investments and renewable projects will boost the company’s clean power generation portfolio.
NiSource’s planned regulated investments will improve the reliability and safety of its services and provide efficient electric and natural gas services to its increasing customer base. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment.
The company is also gaining from its cost-saving initiatives and expects to lower operation and maintenance (O&M) expenses. These cost-saving measures will definitely boost its margins over the long term. NiSource achieved its goal of more than $50 million in cost-saving initiatives in 2023. It observed and incorporated efficiency by performing safer, better, more efficient and low-cost operations. NI is expected to maintain flat O&M expenses through the duration of the five-year plan.
Headwinds
NiSource is presently engaged in a number of capital projects, including environmental improvements in its electric generating stations, as well as the construction of new transmission facilities. A delay in completion increases capital costs and stretches the time limit of the company’s expected benefits from these projects.
Unfavorable fluctuations in weather during the summer and winter months, and economic conditions might adversely impact the demand for energy, which in turn may lower earnings.
Price Performance
In the past three months, shares of the company have risen 12.3% compared with the industry’s 3.4% growth.
DTE’s long-term (three to five years) earnings growth rate is 8.2%. The Zacks Consensus Estimate for DTE’s 2024 earnings per share (EPS) indicates an increase of 16.9% from the previous year.
PNW’s long-term earnings growth rate is 8.2%. The Zacks Consensus Estimate for 2024 EPS implies an improvement of 7.9% from the bottom line recorded in 2023.
The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year increase of 29.4%. The Zacks Consensus Estimate for sales indicates year-over-year growth of 10.3%.
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NiSource (NI) Rides on Infrastructure Upgrade & Clean Assets
NiSource Inc.’s (NI - Free Report) consistent investments to strengthen its existing infrastructure, stable returns from regulated assets and cost-saving initiatives should boost its earnings. The company’s focus on clean energy helps to enhance its overall performance.
However, this Zacks Rank #3 (Hold) company faces risks related to any delay in the completion of projects and weather fluctuations.
Tailwinds
NiSource is working on a long-term utility infrastructure modernization program. The company expects investments in the range of $3.3-$3.5 billion for 2024. It also projected an investment of $16.4 billion during 2024-2028.
NiSource has $2.1 billion of additional investment opportunities through 2028, which is not included in the base plan. These investments and renewable projects will boost the company’s clean power generation portfolio.
NiSource’s planned regulated investments will improve the reliability and safety of its services and provide efficient electric and natural gas services to its increasing customer base. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment.
The company is also gaining from its cost-saving initiatives and expects to lower operation and maintenance (O&M) expenses. These cost-saving measures will definitely boost its margins over the long term. NiSource achieved its goal of more than $50 million in cost-saving initiatives in 2023. It observed and incorporated efficiency by performing safer, better, more efficient and low-cost operations. NI is expected to maintain flat O&M expenses through the duration of the five-year plan.
Headwinds
NiSource is presently engaged in a number of capital projects, including environmental improvements in its electric generating stations, as well as the construction of new transmission facilities. A delay in completion increases capital costs and stretches the time limit of the company’s expected benefits from these projects.
Unfavorable fluctuations in weather during the summer and winter months, and economic conditions might adversely impact the demand for energy, which in turn may lower earnings.
Price Performance
In the past three months, shares of the company have risen 12.3% compared with the industry’s 3.4% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry are DTE Energy (DTE - Free Report) , Pinnacle West Capital Corporation (PNW - Free Report) and Portland General Electric (POR - 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.
DTE’s long-term (three to five years) earnings growth rate is 8.2%. The Zacks Consensus Estimate for DTE’s 2024 earnings per share (EPS) indicates an increase of 16.9% from the previous year.
PNW’s long-term earnings growth rate is 8.2%. The Zacks Consensus Estimate for 2024 EPS implies an improvement of 7.9% from the bottom line recorded in 2023.
The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year increase of 29.4%. The Zacks Consensus Estimate for sales indicates year-over-year growth of 10.3%.