NISOURCE INC. (NI): what the price assumes

boothcheck covers NISOURCE INC. (NI) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/NI

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 5.7% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.7%); the inversion above states its own rate.

Per-Model Detail (n=10)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• NiSource is a regulated gas and electric utility serving the Midwest whose earnings grow with its rate base, and management has lifted its long-term earnings-per-share growth target to 9% to 10% on the back of a large capital program.
• The defining new driver is data center demand: the company has signed roughly 4 gigawatts of generation capacity to serve hyperscalers including Amazon and Alphabet, which is the source of the raised growth outlook but also a concentration of that growth in a single, fast-moving customer category.
• The largest risk is leverage against a heavy build: net debt sits above $15 billion, more than eight times trailing operating income, with interest coverage under three times, so the $21 billion base capital plan through 2030 has to be financed without straining the balance sheet.

Bull Case

Start with the bear's strongest objection, because it turns out to cut the other way. The obvious worry about a regulated utility committing to a $21 billion capital plan is that the spending is risky. For an unregulated company it would be. For NiSource it is the opposite: a regulated utility earns a return set by its regulator on the value of the assets it builds, so capital investment is the mechanism that grows earnings, not a gamble on them. The filing describes the regulatory accounting plainly, that costs subject to rate determination are deferred and recovered through customer rates over time. More spending on approved infrastructure means a bigger rate base earning an allowed return, which is why management can target 9% to 10% annual earnings growth with a straight face.

The new layer on top of the ordinary utility growth is data center demand, and it is large enough to matter. NiSource has signed roughly 4 gigawatts of generation capacity to serve hyperscalers, including a new agreement with Alphabet and incremental capacity with Amazon, bringing about 800 megawatts under contract in the most recent step. These are creditworthy customers contracting for power years in advance, which gives the utility a visible, committed load to build against. That is why the company lifted its long-term earnings growth target and added roughly $600 million to its capital plan, with $21 billion in base investment through 2030 plus $7.6 billion of generation capital for the data center business.

The recent results show the model converting. First-quarter adjusted earnings per share rose 8% to $1.06, and management reaffirmed full-year 2026 adjusted earnings guidance of $2.02 to $2.07. The rate-base growth of 9% to 11% that underpins the earnings target is the steady, regulator-sanctioned engine, and the data center contracts are the accelerant. For a buyer at today's price, the bull case is a regulated utility with above-average, contracted growth, trading in the lower half of its peer multiple range, which is an unusual combination of visibility and value.

Bear Case

The bull case rests on a specific assumption baked into the price: that the data center load growth shows up on schedule and at the contracted scale. That is the fragile part. The roughly 4 gigawatts of signed hyperscaler capacity is the reason the growth target was raised, which means a meaningful slice of the future earnings now depends on a single customer category that is moving fast in both directions. Hyperscaler capital plans can be revised, data center buildouts can slip, and a contracted megawatt is only as good as the counterparty's appetite when the power is due. If the data center demand cools or arrives later than planned, the company is left having committed capital and financing against a load that has not fully materialized.

The financing of that build is the second pressure point, and it is structural. NiSource carries net debt above $15 billion, more than eight times trailing operating income, with interest coverage under three times. Funding $21 billion of base investment plus billions more in generation capital means continuously raising debt and equity, and the company is exposed to capital markets in a way a less leveraged business is not. Its own filing flags the sensitivity: deteriorating economic conditions, "increases in inflation or interest rates, recession or changes in investor sentiment could materially and adversely affect our business, results of operations, cash flows, financial condition and liquidity." Higher rates raise the cost of the debt that funds the plan and pressure the share price of a yield-oriented utility at the same time. Share count has been rising about 2% a year, so equity funding dilutes existing holders to pay for the growth.

The holding-company structure adds a layer of distance between the cash and the shareholder. NiSource depends on its regulated subsidiaries to upstream cash to meet debt obligations and pay the dividend, with the parent relying on "cash generated by our subsidiaries to meet our debt obligations and pay dividends on our stock." On valuation, the asset-based and earnings-power methods both read the price as expensive, near twice their estimates, because they anchor on the thin reported returns of a heavily capitalized, leveraged utility. The price is in the lower half of the peer range, so the bear is not an overvaluation argument; it is that the cheap-looking multiple is cheap because the balance sheet is leveraged and a chunk of the growth depends on the data center bet delivering.

Valuation

The price is set low enough that it is not asking much. Reading today's level backward, the market pays about 18 times operating income, a multiple so modest that the price sits below what even a gradual operating-profit decline would justify. That is the opposite of a demanding bet. For a regulated utility growing its rate base 9% to 11% a year with a raised long-term earnings target, a price that embeds no growth at all is the gap the bull case points at. The framework labels the embedded assumption as within range, and the multiple sits in the lower half of the peer distribution.

The methods split along the line that always divides leveraged utilities. The peer-multiple comparisons read the price as cheap, and the forward-growth methods sit near it, both crediting the regulated rate-base growth and the data center load. The asset-based and earnings-power methods read it as expensive, near twice their estimates, because they anchor on the slim reported returns a company earns when it carries this much debt against its asset base. The honest read is that both are describing the same fact from different angles: the price is low relative to the growth the regulator allows, and high relative to the static earnings power once the leverage is accounted for. Which one matters more depends on whether the growth and the financing both come through.

Solvency is the variable that decides it, and it deserves the heaviest weight. Net debt above $15 billion is more than eight times trailing operating income, with interest coverage under three times, which is a heavy structure even for a regulated business with predictable cash flows. The company can carry it as long as it retains access to debt and equity markets on reasonable terms, which is exactly the condition the filing warns is sensitive to interest rates and investor sentiment. A buyer at today's price is getting above-average, contracted utility growth at a below-average multiple, and the price of that bargain is underwriting a leveraged balance sheet through a multi-year build. The decisive question is financing: if the capital plan and the data center load both deliver while the balance sheet holds, the cheap multiple was the opportunity; if rates bite or the load slips, it was the warning.

Catalysts

The data center contracts are the catalyst reshaping the growth story. NiSource has signed roughly 4 gigawatts of generation capacity to serve hyperscalers, including a new 340 megawatt agreement with Alphabet and incremental capacity with Amazon, with about 800 megawatts added in the latest step. Each new contract and each milestone toward bringing that capacity online is a direct input to the raised earnings target, so the pace of hyperscaler signings and construction is the headline driver over the next year.

The capital plan and guidance frame the financial trajectory. Management reaffirmed 2026 adjusted earnings guidance of $2.02 to $2.07 per share, lifted its long-term earnings-per-share growth target to 9% to 10%, and underpinned it with 9% to 11% rate base growth and a capital plan of $21 billion in base investment through 2030 plus $7.6 billion of generation capital, a roughly $600 million increase. Regulatory approvals and rate cases that let the company recover that spending are the milestones that turn the plan into earnings.

The near-term prints set the cadence. First-quarter adjusted earnings per share rose 8% to $1.06, though quarterly revenue came in below expectations, a reminder that utility revenue can be lumpy while the earnings path stays on track. The financing of the build, including the mix of debt and equity used to fund it, is the parallel thread to watch, because how the capital is raised determines how much of the growth reaches existing shareholders.

Peer Cohorts (Per Segment, With Filing Citations)

Columbia Operations (reported)

• ATO (ATMOS ENERGY CORP)
• FY2025 10-K: …ato:GassalesrevenueMember ato:IndustrialCustomersMember ato:PipelineandStorageSegmentMember 2023-10-01 2024-09-30 0000731802 us-gaap:OperatingSegmentsMember ato:GassalesrevenueMember ato:PublicAuthorityandOtherCustomersMember ato:DistributionSegmentMember 2023-10-01 2024-09-30 0000731802…
• FY2025 10-K: 0000731802 us-gaap:OperatingSegmentsMember ato:GassalesrevenueMember ato:CommercialCustomersMember ato:PipelineandStorageSegmentMember 2022-10-01 2023-09-30 0000731802 us-gaap:OperatingSegmentsMember ato:GassalesrevenueMember ato:IndustrialCustomersMember ato:DistributionSegmentMember 2022-10-01 2023-09-30 0000731802…
• NJR (NEW JERSEY RESOURCES CORPORATION)
• FY2025 10-K: SegmentMember 2022-10-01 2023-09-30 0000356309 us-gaap:OperatingSegmentsMember us-gaap:ElectricityMember njr:CleanEnergyVenturesCEVSegmentMember 2022-10-01 2023-09-30 0000356309 us-gaap:OperatingSegmentsMember us-gaap:ElectricityMember njr:EnergyServicesESSegmentMember 2022-10-01 2023-09-30 0000356309…
• FY2025 10-K: …njr:CleanEnergyVenturesCEVSegmentMember 2023-10-01 2024-09-30 0000356309 us-gaap:OperatingSegmentsMember njr:WholesaleNaturalGasMember njr:EnergyServicesESSegmentMember 2023-10-01 2024-09-30 0000356309 us-gaap:OperatingSegmentsMember njr:WholesaleNaturalGasMember njr:StorageAndTransportationSTSegmentMember 2023-10-01…
• SWX (Southwest Gas Holdings, Inc.)
• FY2025 10-K: We must contract for reliable and adequate delivery capacity for our distribution system while considering the dynamics of the interstate pipeline capacity market, our own on-system resources, as well as the characteristics of our customer base. Interruptions to or reductions of interstate pipeline service caused by…
• FY2025 10-K: …will be reduced for amounts that will be refunded to customers through the ratemaking process. The principal considerations for our determination that performing procedures relating to regulatory assets and liabilities is a critical audit matter are a high degree of auditor effort in performing procedures and…
• SR (Spire Inc.)
• FY2025 10-K: …to these matters. The amount remains immaterial, and Spire Missouri, Spire Alabama and the Company do not expect potential liabilities that may arise from remediating these sites to have a material impact on their future financial condition or results of operations. Spire Missouri Spire Missouri has identified three…
• FY2025 10-K: …sr:SpireMissouriMember 2024-09-30 0001126956 sr:SpireNoteMember sr:SpireMissouriMember 2024-10-01 2025-09-30 0001126956 srt:AffiliatedEntityMember us-gaap:UnregulatedOperationMember sr:SpireAlabamaIncMember sr:SpireSTLPipelineLLCMember 2023-10-01 2024-09-30 0001126956…
• NWN (NORTHWEST NATURAL HOLDING COMPANY)
• FY2025 10-K: …management strategies are used to reduce liquidity risk. The collateral provisions vary by counterparty but are not expected to result in the significant posting of collateral, if any. NW Natural has performed stress tests on the gas portfolio and concluded the liquidity risk from collateral calls is not material.…
• FY2025 10-K: …liability; the high end of the range cannot be reasonably estimated at this time. The NRD liability is not included in the aforementioned range of costs provided in the Portland Harbor ROD. Gasco Uplands Site A predecessor of NW Natural, Portland Gas and Coke Company, owned a former gas manufacturing plant that was…
• NFG (NATIONAL FUEL GAS CO)
• FY2025 10-K: …nfg:IntegratedUpstreamAndGatheringMember 2022-10-01 2023-09-30 0000070145 us-gaap:OperatingSegmentsMember nfg:NaturalGasCommercialSalesMember nfg:PipelineAndStorageMember 2022-10-01 2023-09-30 0000070145 us-gaap:OperatingSegmentsMember nfg:NaturalGasCommercialSalesMember nfg:UtilityMember 2022-10-01 2023-09-30…
• FY2025 10-K: …nfg:NaturalGasProcessingMember nfg:IntegratedUpstreamAndGatheringMember 2023-10-01 2024-09-30 0000070145 us-gaap:OperatingSegmentsMember nfg:NaturalGasProcessingMember nfg:PipelineAndStorageMember 2023-10-01 2024-09-30 0000070145 us-gaap:OperatingSegmentsMember nfg:NaturalGasProcessingMember nfg:UtilityMember…
• UGI (UGI CORPORATION)
• FY2025 10-K: …of November 30, 2001, by and among UGI Energy Services, LLC, as servicer, Energy Services Funding Corporation, as seller, and PNC Bank, National Association, as issuer and administrator. UGI Form 8-K (10/17/25) 10.1 10.42 Form of Purchase and Sale Agreement, dated as of November 30, 2001, as amended through and…
• FY2025 10-K: -gaap:OperatingSegmentsMember ugi:ResidentialMember ugi:UGIUtilitiesIncMember 2022-10-01 2023-09-30 0000884614 us-gaap:OperatingSegmentsMember ugi:ResidentialMember ugi:MidstreamAndMarketingMember 2022-10-01 2023-09-30 0000884614 us-gaap:OperatingSegmentsMember ugi:ResidentialMember ugi:UGIInternationalMember…

NIPSCO Operations (reported)

• WEC (WEC ENERGY GROUP, INC.)
• FY2025 10-K: /OT Information Technology and Operational Technology ITC Investment Tax Credit Koshkonong Koshkonong Solar Park LDC Local Natural Gas Distribution Company LMP Locational Marginal Price LNG Liquefied Natural Gas MISO Midcontinent Independent System Operator, Inc. MISO Energy Markets MISO Energy and Operating Reserves…
• FY2025 10-K: …purchase commitments with unaffiliated parties consist of 1,133 MWs per year for 2026 through 2029 and 1,033 MWs in 2030. This amount includes 1,033 MWs per year related to a long-term PPA for electricity generated by Point Beach. If necessary, we purchase planning capacity from the MISO annual auction to ensure that…
• CMS (CMS ENERGY CORP)
• FY2025 10-K: …authorized return on equity for the projected 12‑month period ending October 31, 2027. Presented in the following table are the components of the requested increase in revenue: In Millions Projected 12-Month Period Ending October 31 2027 Investment in rate base $ 108 Operating and maintenance costs 65 Cost of capital…
• FY2025 10-K: …equal to 1 million watt-hours NAAQS National Ambient Air Quality Standards Natural Gas Act Natural Gas Act of 1938 NERC North American Electric Reliability Corporation, a non‑affiliated company responsible for developing and enforcing reliability standards, monitoring the bulk power system, and educating and…
• ES (EVERSOURCE ENERGY)
• FY2025 10-K: 4-12-31 0000072741 us-gaap:OperatingSegmentsMember es:WholesaleTransmissionRevenueMember es:NstarElectricCompanyMember 2024-01-01 2024-12-31 0000072741 us-gaap:OperatingSegmentsMember es:WholesaleTransmissionRevenueMember es:PublicServiceCompanyOfNewHampshirePSNHMember 2024-01-01 2024-12-31 0000072741…
• FY2025 10-K: …and Extension Agreement, dated October 17, 2022, by and between NSTAR Electric Company and the Banks named therein, pursuant to which Barclays Bank PLC serves as Administrative Agent and Swing Line Lender ( Exhibit 4.1, Eversource Energy Quarterly Report on Form 10-Q filed on November 4, 2022, File No. 001-05324 )…
• PEG (PUBLIC SERVICE ENTERPRISE GROUP INC)
• FY2025 10-K: …PTC guidance uncertainty, and potential incremental changes upon receiving U.S. Treasury guidance. Our fuel strategy is to maintain certain levels of uranium in inventory and to make periodic purchases to support such levels. LIPA Operations Services Agreement (OSA) PSEG LI has been operating LIPA's electric T&D…
• FY2025 10-K: …those costs as revenues when Servco is a principal in the transaction. In September 2025, the LIPA board of trustees approved a five-year extension of the contract. See Amended OSA below for further information. Other Revenues from Contracts with Customers PSEG Power has contracted to provide energy management and…
• AEE (AMEREN CORP)
• FY2025 10-K: …and our estimate of electric and natural gas retail distribution services provided but unbilled at the end of each accounting period. Customers are billed at least monthly, and payments are due less than one month after goods and/or services are provided. See Note 16 - Segment Information for disaggregated revenue…
• FY2025 10-K: …commission orders or legislation, (ii) evaluating management's assessment of the probability of recovery of regulatory assets and refund of regulatory liabilities, and (iii) evaluating management's assessment of regulatory mechanisms meeting the alternative revenue program criteria and the expected timing of…
• EVRG (EVERGY, INC.)
• FY2025 10-K: …a future event that may or may not be within the control of the entity. In determining Evergy's AROs, assumptions are made regarding probable future disposal costs and the timing of their occurrence. The results of these assumptions are discounted using credit-adjusted risk-free rates (CARFR). The CARFR is determined…
• FY2025 10-K: Central's internal control over financial reporting is effective based on the criteria set forth in the COSO framework. EVERGY METRO Disclosure Controls and Procedures Evergy Metro maintains a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed…
• LNT (ALLIANT ENERGY CORP)
• FY2025 10-K: …service expense, and discussion of WPL's escrow for recovery of electric transmission service expense, which is recovered from its retail electric customers through changes in base rates determined during periodic rate proceedings. MISO Markets - IPL and WPL are members of MISO, a FERC-approved Regional Transmission…
• FY2025 10-K: …allowances to ensure ongoing compliance without the need to purchase additional allowances or materially curtail operations. New Source Performance Standards (NSPS) for Combustion Turbines - The EPA establishes requirements under the CAA for various categories of stationary sources that cause or contribute…
• XEL (XCEL ENERGY INC)
• FY2025 10-K: …Services - NSP-Minnesota and NSP-Wisconsin have contracts with MISO and other regional transmission service providers to deliver power and energy to their customers. Wholesale and Commodity Marketing Operations NSP-Minnesota conducts wholesale marketing operations, including the purchase and sale of electric…
• FY2025 10-K: …transmission system, PSCo has contracts with regional transmission service providers to deliver energy to its customers. Wholesale and Commodity Marketing Operations PSCo conducts various wholesale marketing operations, including the purchase and sale of electric capacity, energy, ancillary services and energy…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.