Spire (SR) PT Raised to $65 at Mizuho

Mizuho analyst Gabriel Moreen raised the price target on Spire (NYSE: SR) to $65.00 (from $62.00) while maintaining a Neutral rating.

The analyst commented: "SR shares have held value reasonably well YTD (+9.1%), but have underperformed the wider (UTY +22.7%) and LDC (+24.4%) groups and trade at a five-year record NTM P/E discount to LDC peers. We attribute the underperformance to inconsistent execution, as SR cut FY24 adj EPS guide in its F3Q24 update (from $4.35/sh midpoint to $4.20/sh). This update was preceded by lower guidance at its Utility segment, which represents the core regulated business. We expect this issue to get worse before it improves, as we anticipate muted FY25 guidance before a Spire Missouri rate case can reinvigorate growth in FY26.

The inconsistency can partly be explained by SR's concentration in Missouri, but we believe additional headwinds including a higher rate environment will continue to pressure the FY25 outlook. We reiterate Neutral as we look for more consistency and improved balance sheet. PT to $65 on higher FY26 estimates."

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