NISOURCE INC. (NI): what the price requires
The current priced-in claim for NISOURCE INC. (NI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/NI
Headline
| Field | Value |
|---|---|
| Ticker | NI |
| Company | NISOURCE INC. |
| Current price | $47.06/sh |
| Composition | Gas Distribution - Residential 45% / Gas Distribution - Commercial 16% / Gas Distribution - Industrial 4% / Gas Distribution - Off-system 1% / Gas Distribution - Wholesale 0% / Gas Distribution - Miscellaneous 1% / Electric Generation and Power Delivery - Residential 12% / Electric Generation and Power Delivery - Commercial 11% / Electric Generation and Power Delivery - Industrial 9% / Electric Generation and Power Delivery - Wholesale 1% / Electric Generation and Power Delivery - Public Authority 0% / Electric Generation and Power Delivery - Miscellaneous 0% / Other Revenues (alternative revenue programs) 2% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 18.9% |
| Multiple paid | 18x operating income |
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 6.2% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~12.7%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.46σ |
| cohort percentile (of 70 peers) | 30 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.10x | 5 | expensive |
| Earnings | 2.17x | 3 | expensive |
| Relative | 0.80x | 5 | justifies |
| Growth | 1.23x | 4 | expensive |
Families that justify the price: Relative, 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 9.4%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $40.01 | 1.18x | yes | FCF base $1.0B, growth 15% (input: historical growth), terminal g 4.0%, WACC 9.4%, 6yr projection |
| DCF Exit Multiple | Growth | $46.08 | 1.02x | yes | Exit EV/EBITDA: 5.7x / 7.7x / 9.7x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $63.63 | 0.74x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.3x / 20.0x / 23.7x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $29.35 | 1.60x | yes | Stage 1: 10% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $21.62 | 2.18x | yes | BV/sh $20.08, ROE (TTM) 10.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $22.41 | 2.10x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $36.49 | 1.29x | yes | Rev $11.3B, growth 15% (input: historical growth; tapered), Terminal P/S: 1.6x / 2.0x / 2.4x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $24.12 | 1.95x | yes | EPS $2.01, growth 10% (input: historical EPS growth), PEG=2.36 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $17.78 | 2.65x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.45B × (1−21%) / WACC 9.4% → EPV (no growth) |
| Residual Income | Asset | $22.56 | 2.09x | yes | BV $20.08 + 5yr PV of (ROE (TTM) 10.0% − Kₑ 9.3%) × BV; BV grows 6.5%/yr |
| Graham Number | Asset | $30.14 | 1.56x | yes | √(22.5 × EPS $2.01 × BVPS $20.08) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $81.06 | 0.58x | yes | EBITDA $3.09B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $47.86 | 0.98x | yes | EPS $2.01 × (8.5 + 2×10.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $12.73 | 3.70x | yes | BV $20.08 × (ROIC 5.9% / WACC 9.4%) |
| P/Sales Sector | Relative | $58.91 | 0.80x | yes | Revenue $11.33B × sector P/S 2.5x |
| PEG Fair Value | Relative | $30.01 | 1.57x | yes | EPS $2.01 × (PEG 1.5 × growth 10.0% (input: historical EPS growth)) → PE 14.9x |
| Earnings Yield | Earnings | $21.73 | 2.17x | yes | EPS $2.01 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $15.4b |
| Net debt / NOPAT (after-tax) | 9.12x |
| Net debt / operating income (pre-tax) | 7.20x |
| Interest coverage | 3.3x |
| Share count CAGR (dilution) | 2.2% |
| Burning cash | no |
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)
- (no filing in the citation store)
- NJR (NEW JERSEY RESOURCES CORPORATION)
- (no filing in the citation store)
- SWX (Southwest Gas Holdings, Inc.)
- (no filing in the citation store)
- SR (Spire Inc.)
- (no filing in the citation store)
- NWN (NORTHWEST NATURAL HOLDING COMPANY)
- (no filing in the citation store)
- NFG (NATIONAL FUEL GAS CO)
- (no filing in the citation store)
- UGI (UGI CORPORATION)
- (no filing in the citation store)
NIPSCO Operations (reported)
- WEC (WEC ENERGY GROUP, INC.)
- (no filing in the citation store)
- CMS (CMS ENERGY CORP)
- (no filing in the citation store)
- ES (EVERSOURCE ENERGY)
- (no filing in the citation store)
- PEG (PUBLIC SERVICE ENTERPRISE GROUP INC)
- (no filing in the citation store)
- AEE (AMEREN CORP)
- (no filing in the citation store)
- EVRG (EVERGY, INC.)
- (no filing in the citation store)
- LNT (ALLIANT ENERGY CORP)
- (no filing in the citation store)
- XEL (XCEL ENERGY INC)
- (no filing in the citation store)
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.
- 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.
Sources
NiSource Q1 2026 results · company 10-K, fiscal 2024