Spire Inc. (SR): what the price assumes

boothcheck covers Spire Inc. (SR) 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 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/SR

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 5.5% cost of capital with 4% terminal growth over a 5-year stage (computed at the 5.5% minimum rate; the CAPM rate 3.8% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~25%/yr; the models below use their own rates.

How unusual the bet is: elevated

Valuation X-Ray

The price is supported by asset-based value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.

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: Asset Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.9%); the inversion above states its own rate.

Per-Model Detail (n=8)

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

• Spire is the largest natural gas distributor in Missouri, "serving approximately 1.2 million residential, commercial and industrial customers" there [FY2025 10-K, accession 0001193125-25-282583], and just added Tennessee: the $2.48 billion purchase of Duke Energy's Piedmont Tennessee gas business closed March 31, 2026.
• The risk concentrates in leverage and weather: interest coverage runs about 2.4 times trailing operating income after the debt-financed acquisition, and the company has asked Missouri regulators for an accounting order to recover a margin shortfall caused by weather-driven usage.
• Watch the raised fiscal 2026 adjusted EPS guidance of $5.40 to $5.60 and the first full quarters of Spire Tennessee; the dividend, increased a twenty-third consecutive year to $3.30 annualized, rides on both.

Bull Case

Start with where the price sits against the methods, because for a regulated utility that is the whole conversation: peer-multiple comparisons land about a third above today's $80.71, asset-based and dividend-growth arithmetic sit essentially at it, and only the earnings-power lens reads the price as somewhat rich. A utility priced below its peer group with its asset value fully backing the price is the cheap end of a sector that rarely gets cheap, and the yield does the rest of the argument: the dividend was raised for the twenty-third consecutive year to $3.30 per share annualized, about a 4% yield at today's price, still covered by the $5.40 to $5.60 of guided fiscal 2026 adjusted EPS.

The growth engine is the rate base, and it just got materially bigger. Spire closed the $2.48 billion acquisition of Duke Energy's Tennessee Piedmont gas business on March 31, 2026, adding more than 200,000 customers and nearly 3,800 miles of pipeline in one of the fastest-growing regions in the country. That sits on top of a 10-year, $11.2 billion capital plan management expects to drive 5 to 7% long-term adjusted EPS growth, and the regulatory machinery to convert spend into revenue is functioning: the latest Missouri rate agreement produced "a net base rate increase of $137.4" million on top of infrastructure-surcharge recoveries [FY2025 10-K, accession 0001193125-25-282583]. Regulated capex that earns an allowed return with a decades-long runway is, frankly, just how utilities compound.

The commodity risk most investors fear in a gas name is largely passed through, not borne: the utilities' tariffs contain purchased-gas adjustment clauses that "permit the Utilities to file for rate adjustments to recover the cost of purchased gas" [FY2025 10-K, accession 0001193125-25-282583], so gas prices flow to customers while Spire earns on the pipes. With guidance just raised, the Tennessee earnings contribution arriving, the preferred stock redeemed in February, and a below-peer multiple, the setup is a dividend compounder priced as if its growth plan were ordinary.

Bear Case

The competitor that matters for a gas distributor is not another gas company; it is the electric utility next door and the policy current behind it. Every heat pump installed in St. Louis, Kansas City, or Nashville is a customer whose winter therms shrink, and electrification is a one-way ratchet backed by building codes and federal incentives. Spire's own recent operating problem previews the demand risk in miniature: weather-driven usage patterns produced a margin shortfall large enough that the company filed for an Accounting Authority Order in Missouri just to create a regulatory asset for it. A business that needs regulatory accounting relief after a warm winter is a business whose volumes are structurally hostage to both the thermometer and the energy transition, and the transition only points one direction.

The balance sheet amplifies whatever the demand curve does. Even before the Tennessee deal, the fiscal 2025 10-K showed $3,879.1 million of long-term debt principal with $487.5 million due in fiscal 2026 [FY2025 10-K, accession 0001193125-25-282583]; the $2.48 billion acquisition then layered on a financing mix of debt, equity, and hybrid securities, and trailing interest coverage now runs about 2.4 times operating income. The equity piece of that mix is the quiet cost: the share count has grown about 3.3% a year for four years, so each new dollar of rate-base earnings is split across more owners, and the 5 to 7% EPS growth target is what remains after dilution only if regulators keep granting timely recovery. Missouri's sharing mechanisms (off-system sales split 75/25 in customers' favor [FY2025 10-K, accession 0001193125-25-282583]) illustrate the asymmetry of regulated economics: upside is shared, cost overruns are litigated.

And the price, while below peer multiples, is not below what the business earns today: the earnings-power lens sits about a third under the price, meaning the market is already crediting the growth plan. Worked through at even a floor-level cost of capital, the premium the price assigns to the gas utility segment requires growth persisting near its feasible ceiling for about six years, and only about a third of comparable growers have sustained that. For an interest-rate-sensitive, weather-exposed, freshly re-levered utility whose end product faces managed decline in its home markets, the cheap-versus-peers reading may simply be the market ranking gas utilities last in a sector it already owns for safety.

Valuation

The premium in Spire's price sits on the Gas Utility segment: decomposed at a 7% cost of capital (a floor rate; the CAPM rate for a utility this stable sits below it), today's price implies the utility's operating growth holding near its self-funding ceiling for roughly six years, a persistence about a third of comparable growers have historically delivered. Keep that as an approximation rather than a solved fact; the practical version is that the market is paying for the $11.2 billion capital plan and the Tennessee expansion to convert into allowed returns on schedule. The regulatory record supports part of it: the most recent Missouri rate agreement added $137.4 million of net base rates [FY2025 10-K, accession 0001193125-25-282583], and fiscal 2026 adjusted EPS guidance was raised to $5.40 to $5.60 with the acquisition contributing.

Across the methods the price sits in unusually tight formation: peer-multiple comparisons land about a third above it (the one clear support), asset-value and dividend-discount arithmetic land within a few percent of it, and capitalized current earnings sit about a quarter to a third below it. The pattern says the market prices Spire as a fair-value utility with a below-average multiple, discounting neither disaster nor much of the growth plan. What separates the readings is the growth conversion: the earnings-power lens sees only today's profit; the peer lens sees a sector where rate-base growth is routinely paid for in advance.

Leverage is the governing constraint. Pre-acquisition long-term debt stood at $3,879.1 million of principal with $487.5 million maturing in fiscal 2026 [FY2025 10-K, accession 0001193125-25-282583]; the $2.48 billion Tennessee purchase added a financing mix of debt, equity, and hybrids, and trailing interest coverage runs about 2.4 times operating income, thin in absolute terms and normal only by the standards of rate-base-funded utilities. The share count grows about 3.3% a year as equity funds the capex, and the $3.30 annualized dividend (raised a twenty-third straight year) consumes most of the guided EPS midpoint. The price needs three things to hold at once: regulators granting timely recovery (including the pending weather AAO), Tennessee integrating on plan, and rates staying benign enough that 2.4 times coverage never becomes the story.

Catalysts

Spire Tennessee is the live integration story: the $2.48 billion acquisition of Duke Energy's Piedmont Tennessee gas business closed March 31, 2026, bringing 200,000-plus customers and nearly 3,800 miles of pipe. Each quarterly print through fiscal 2026 shows the first clean reads on its earnings contribution, financing costs, and any purchase-accounting noise; management's raised fiscal 2026 adjusted EPS guidance of $5.40 to $5.60 already leans on it.

Regulatory items carry the medium term. The Missouri Accounting Authority Order request, seeking a regulatory asset for the weather-driven margin shortfall, is a direct test of how much weather risk regulators will let Spire defease; the outcome reads through to every future warm winter. Rate-case cadence across Missouri, Alabama, and now Tennessee converts the $11.2 billion ten-year capital plan into allowed revenues, and the permanent financing mix for the acquisition (debt, equity, hybrids) determines how much of the accretion survives to the per-share line.

Income investors have their own calendar: the quarterly dividend of $0.825 (annualized $3.30, the twenty-third consecutive annual increase) and the February 13, 2026 redemption of the 5.90% Series A preferred simplify the capital stack ahead of the heavier financing year. The fiscal Q3 print, on the usual early-August cadence, is the next scheduled event.

Peer Cohorts (Per Segment, With Filing Citations)

Gas Utility (reported)

• ATO (ATMOS ENERGY CORP)
• FY2025 10-K: …conserve their use of gas or choose another energy product, reduced gas purchases and customer billings could adversely impact our business. In the case of industrial customers, such as manufacturing plants, adverse economic conditions, including higher gas costs, could cause these customers to use alternative…
• FY2025 10-K: …we estimate volumes from the last meter read to the balance sheet date and accrue revenue for gas delivered but not yet billed. In our Texas and Mississippi jurisdictions, we pay franchise fees and gross receipt taxes to operate in these service areas. These franchise fees and gross receipts taxes are required to be…
• NI (NISOURCE INC.)
• FY2025 10-K: …related to unrecognized tax benefits. We have adopted this ASU on a retrospective basis in the income tax footnote 15, for the year ended December 31, 2025. 3. Revenue Recognition Customer Revenues. Substantially all of our revenues are tariff-based. Under ASC 606, the recipients of our utility service meet the…
• FY2025 10-K: …pipeline safety, employee safety, the environment and our energy infrastructure. In particular, we are subject to significant federal, state and local regulations applicable to utility companies, including regulations by the various utility commissions in the states where we serve customers. These regulations…
• SWX (Southwest Gas Holdings, Inc.)
• FY2025 10-K: …customer demand associated with population growth and economic development activity, and the safe and reliable operation of its system through adherence to integrity management programs. Public utility rates, practices, facilities, and service territories of Southwest Gas are subject to regulatory oversight. The…
• FY2025 10-K: …authorities, implementation of new regulations or regulatory mechanisms, assessing the probability of the recoverability of deferred costs, and continuing to meet the criteria of a rate regulated entity for accounting purposes. Refer also to Note 5 - Regulatory Assets and Liabilities . Accrued Utility Revenues…
• NJR (NEW JERSEY RESOURCES CORPORATION)
• FY2025 10-K: …of NJNG. NJNG's Utility Gross Margin is defined as operating revenues less natural gas purchases, sales tax and regulatory rider expenses. This measure differs from gross margin as presented on a GAAP basis, as it excludes certain operations and maintenance expense and depreciation and amortization. Utility Gross…
• FY2025 10-K: …2024-10-01 2025-09-30 0000356309 us-gaap:OperatingSegmentsMember njr:ServiceContractsMember njr:NaturalGasDistributionNJNGSegmentMember 2024-10-01 2025-09-30 0000356309 us-gaap:OperatingSegmentsMember njr:ServiceContractsMember njr:CleanEnergyVenturesCEVSegmentMember 2024-10-01 2025-09-30 0000356309…

Gas Marketing (reported)

• NFG (NATIONAL FUEL GAS CO)
• FY2025 10-K: …retained a substantial majority of small sales customers. In both New York and Pennsylvania, approximately 8% of Distribution Corporation's small-volume residential and commercial customers purchase their supplies from unregulated marketers. In contrast, almost all large commercial and industrial customers are served…
• FY2025 10-K: …Purchased Gas Costs, or a liability, Amounts Payable to Customers. These deferrals are subsequently collected from the customer or passed back to the customer, subject to review by the NYPSC and the PaPUC. Absent disallowance of full recovery of Distribution Corporation's purchased gas costs, such costs do not impact…
• NI (NISOURCE INC.)
• FY2025 10-K: …Center, IN Natural Gas 7,240,000 Rolling Prairie LNG Rolling Prairie, IN Liquified Natural Gas 4,000,000 Total Capacities 11,240,000 Competition. Similar to the Columbia Operations segment, NIPSCO Gas operates in an open and competitive market which allows retail customers to purchase gas directly from producers and…
• FY2025 10-K: Discussion and Analysis of Financial Condition and Results of Operations" and Note 21, "Business Segment Information," in the Notes to Consolidated Financial Statements for additional information related to each segment. Columbia Operations Columbia Operations provides natural gas to approximately 2.4 million…
• CMS (CMS ENERGY CORP)
• FY2025 10-K: …in 2024, and $2.4 billion in 2023. Consumers' gas utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan's Lower Peninsula. Presented in the following illustration is Consumers' 2025 gas utility operating revenue of $2.5 billion by customer…
• FY2025 10-K: …retail services. Michigan law allows electric customers in Consumers' service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers' sales, with certain exceptions. At December 31, 2025, electric deliveries under the ROA program were…
• WEC (WEC ENERGY GROUP, INC.)
• FY2025 10-K: …distribution and customer service functions for the customer. Natural Gas Utility Industry We offer natural gas transportation services to our customers that elect to purchase natural gas directly from a third-party supplier. Since these transportation customers continue to use our distribution systems to transport…
• FY2025 10-K: …compete with other utilities for sales to municipalities and cooperatives as well as with other utilities and marketers for wholesale electric business. Natural Gas Utility Operations - Wisconsin, Illinois, and Other States Segments Our natural gas utilities also face varying degrees of competition from other…
• ES (EVERSOURCE ENERGY)
• FY2025 10-K: …Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. NATURAL GAS DISTRIBUTION SEGMENT Our natural gas businesses are engaged in the distribution and sale of natural gas to customers. NSTAR Gas distributes natural gas to approximately 306,000 customers in 59 communities in…
• FY2025 10-K: -01-01 2024-12-31 0000072741 us-gaap:OperatingSegmentsMember es:TotalRetailSalesRevenueMember es:NaturalGasDistributionMember 2024-01-01 2024-12-31 0000072741 us-gaap:OperatingSegmentsMember es:TotalRetailSalesRevenueMember es:EversourceElectricTransmissionMember 2024-01-01 2024-12-31 0000072741…
• PEG (PUBLIC SERVICE ENTERPRISE GROUP INC)
• FY2025 10-K: …and Gas Distribution Statistics Customers as of December 31, 2025 Historical Annual Customer Growth 2021-2025 Electric Sales and Firm Gas Sales for the Year Ended December 31, 2025 (A) Historical Annual Load Increase 2021-2025 Electric 2.4 million 0.9% 40,561 Gigawatt Hours 0.4% Gas 1.9 million 0.7% 2,633 Million…
• FY2025 10-K: …of $120 million due to lower MTM losses in 2025 as compared to 2024. Of this amount, there was a $101 million increase due to positions reclassified to realized upon settlement, coupled with a $19 million increase due to changes in forward prices in 2025 as compared to 2024. Gas Supply Revenues increased $362 million…
• NWE (NORTHWESTERN ENERGY GROUP, INC.)
• FY2025 10-K: …described within Note 2 - Significant Accounting Policies . Segment asset and capital expenditure information is not provided for our reportable segments. As an integrated electric and gas utility, we operate significant assets that are not dedicated to a specific reportable segment. Financial data for the business…
• FY2025 10-K: …in our Montana, South Dakota, and Nebraska jurisdictions. We recognize revenue when natural gas is delivered to the customer. Payments on our tariff based sales are generally due in 20-30 days after the billing date. Disaggregation of Revenue The following tables disaggregate our revenue for the twelve months ended…
• FE (FIRSTENERGY CORP)
• FY2025 10-K: …us-gaap:ProductAndServiceOtherMember fe:JERSEYCENTRALPOWERLIGHTCOMPANYMember fe:RegulatedDistributionMember 2025-01-01 2025-12-31 0001031296 us-gaap:OperatingSegmentsMember us-gaap:ProductAndServiceOtherMember fe:JERSEYCENTRALPOWERLIGHTCOMPANYMember fe:RegulatedDistributionMember 2024-01-01 2024-12-31 0001031296…
• FY2025 10-K: Member fe:RegulatedDistributionMember 2023-01-01 2023-12-31 0001031296 us-gaap:OperatingSegmentsMember fe:CommercialCustomersMember fe:JERSEYCENTRALPOWERLIGHTCOMPANYMember fe:RegulatedDistributionMember 2025-01-01 2025-12-31 0001031296 us-gaap:OperatingSegmentsMember fe:CommercialCustomersMember…

Midstream (reported)

• WMB (WILLIAMS COMPANIES, INC.)
• FY2025 10-K: L pipeline and fractionated at either its Moundsville or Harrison fractionation facility. The resulting products are then transported on truck, rail, or pipeline. Ohio Valley Midstream provides residue natural gas take away options for customers with interconnections to three interstate transmission pipelines. Certain…
• FY2025 10-K: …gas marketers and producers, intrastate pipelines, direct industrial users, and electrical power generators. Customers in Williams' midstream businesses are comprised of oil and natural gas producer counterparties. Customers for Williams' product sales are comprised of public utilities, gas marketers, and direct…
• OKE (ONEOK INC /NEW/)
• FY2025 10-K: …and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed today and into the future. Midstream Value Chain The midstream value chain is a vital part of the energy industry. After crude oil and natural gas are produced from upstream wells, we use…
• FY2025 10-K: Midstream Partners, LP, as guarantor, and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to EnLink Midstream, LLC's Current Report on Form 8-K, filed Jan uary 31, 2025, File No. 001-36336). 4.80 Second Supplemental Indenture, dated as of Jan uary 31, 2025, by and among ONEOK,…
• KMI (KINDER MORGAN, INC.)
• FY2025 10-K: …from the acquired Outrigger Energy assets on our Hiland Midstream assets; and (iii) higher gathering rates on KinderHawk. Overall, Midstream's revenue changes are partially offset by corresponding changes in costs of sales. In addition, the increase in Midstream includes a gain on the sale of our equity interest in…
• FY2025 10-K: I LLC for a purchase price of $ 648 million, including purchase price adjustments for working capital. Other long-term assets within the purchase price allocation consist of a customer relationships intangible with a weighted average amortization period of approximately 15 years. The acquisition includes a 0.27 Bcf/d…
• TRGP (TARGA RESOURCES CORP.)
• FY2025 10-K: …13, 2026. Growth Drivers, Competitive Strengths and Strategies While we believe that we are well positioned to execute our business strategies based on our growth drivers, competitive strengths and strategies outlined below, our business involves numerous risks and uncertainties which may prevent us from executing…
• FY2025 10-K: …was determined using the cost approach and was primarily comprised of Gathering and Processing assets that will be depreciated on a straight-line basis over the useful lives of the assets. The associated useful lives of property, plant and equipment were based on the period over which the assets are expected to…
• ET (ENERGY TRANSFER LP)
• FY2025 10-K: …systems due to higher rates on higher contracted volumes, a $40 million negative impact in the prior period related to the conclusion of a rate case on our Panhandle system, a $24 million increase in operational gas sales and liquids and a $5 million increase in storage and parking revenue; 114 Table of Contents…
• FY2025 10-K: …are typically due the month after the services have been performed. F - 66 Table of Contents Index to Financial Statements The performance obligations with respect to our midstream segment's contracts are to provide gathering, transportation and processing services, each of which would be completed on or about the…
• EPD (ENTERPRISE PRODUCTS PARTNERS L.P.)
• FY2025 10-K: …we have an unconditional right of payment from the customer. Payments received from customers in advance of the period in which we satisfy a performance obligation are recorded as deferred revenue (a contract liability) on our consolidated balance sheet. Our revenue streams are derived from the sale of products and…
• FY2025 10-K: …terminals (including those used to export liquefied petroleum gases ("LPG") and ethane); • crude oil gathering, transportation, storage, and marine terminals; • propylene production facilities (including propane dehydrogenation ("PDH") facilities), butane isomerization, octane enhancement, isobutane dehydrogenation…
• PAA (PLAINS ALL AMERICAN PIPELINE LP)
• FY2025 10-K: …and providing upstream connectivity and downstream market optionality. • Wink to Webster Pipeline (Permian to Houston). We own an approximate 17% interest in the entity that owns the Wink to Webster Pipeline ("W2W Pipeline"), which in turn owns 100% of certain segments of the W2W Pipeline and a 71% UJI in the segment…
• FY2025 10-K: …entity as a consolidated subsidiary in our Consolidated Financial Statements within our Crude Oil segment. The transaction resulted in a net gain of approximately $ 31 million, which represents the difference between the fair value of the entity and the historical book value of our investment. This gain is reflected…

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.