UPDATE: UBS Upgrades NiSource (NI) to Buy, 'Mispriced Strong Earnigns Story'
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UBS analyst Aga Zmigrodzka upgraded NiSource (NYSE: NI) from Neutral to Buy with a price target of $27.00 (from $25.00).
The analyst comments "We are upgrading NI to Buy as NI's stock price remains over 20% below the prepandemic level despite the acceleration of the renewable capex and long term earnings outlook above peer group average. NI trades at 16.3x P/'22E roughly inline with peer group average; however, we estimate '21-'24 EPS CAGR of ~8% above peer group average of ~6%. NI expects rate base growth of 10-12% above peer group average of 9.2% and we believe the strong long term growth is not priced in. With the sale of the Columbia Gas of MA, recovery post COVID and a positive decision on the rate case in PA, the expected hybrid or convertible equity issuance could still keep some investors on the sidelines. Hence, the issuance announcement in 1H21 could be a positive catalyst. We also see a potential for '21 positive guidance revision if the COVID impact is lower than expected. NI included ~$0.05 impact from the pandemic in '21 EPS guidance and during the 4Q call management noted that it is cautiously optimistic about the recovery and that it could potentially tighten its outlook on COVID post 1Q21."
Shares of NiSource closed at $23.87 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades
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