Jefferies cuts NiSource price target to $45, maintains Buy rating

Jefferies analyst Julien Dumoulin-Smith lowered the price target for NiSource (NI) to $45 from $46, while reiterating a Buy rating, citing ongoing customer engagement and GenCo progress. The analyst forecasts a 9.2% EPS CAGR from 2025-2029, above consensus, and anticipates a July 1st hearing could improve the company's risk-adjusted return profile. NiSource also reported strong Q1 2025 EPS of $0.98, exceeding expectations, and reaffirmed its 2025 EPS guidance, supporting the positive outlook.

Analysis

Jefferies has reaffirmed a Buy rating on NiSource (NYSE: NI) while slightly adjusting the price target to $45 from $46, reflecting a cautiously optimistic outlook. This stance is supported by NiSource's ongoing engagement with approximately 30 large-load customers and visible progress in its Generation Company (GenCo), which are seen as drivers for potential valuation growth. Despite a lack of acceleration in DC announcements, Jefferies views the current situation as an attractive entry point ahead of a key hearing scheduled for July 1st, which could enhance the company's risk-adjusted return profile. The analyst projects a robust 9.2% compound annual growth rate (CAGR) in earnings per share (EPS) for NiSource from 2025 to 2029, notably above the consensus of 8.1% and the upper end of the company's own 8.0% guidance. NiSource's financial health is rated as 'GOOD' by InvestingPro, and the stock has delivered an impressive 42.72% return over the past year. Further bolstering investor confidence, NiSource reported strong Q1 2025 adjusted EPS of $0.98, surpassing analyst expectations of $0.90, although revenue of $2.03 billion fell short of the $2.21 billion forecast. The company reaffirmed its 2025 EPS guidance of $1.85 to $1.89 and announced a quarterly dividend of $0.28 per share, continuing its 39-year streak of dividend payments, with eight consecutive years of increases. InvestingPro analysis indicates the stock is currently fairly valued, with analyst targets ranging from $35.34 to $48.15 against a trading price of $39.35.

Key Decisions for Investors

• Investors may find NiSource an attractive opportunity given Jefferies' reaffirmed Buy rating, strong forecasted EPS growth exceeding consensus, and a consistent dividend payment history, though the slight price target reduction warrants consideration.
• The upcoming July 1st hearing is a significant near-term catalyst; its outcome should be closely monitored as it could materially impact NiSource's risk-adjusted return profile and stock performance.
• While the Q1 EPS beat and reaffirmed 2025 guidance are positive, the Q1 revenue miss suggests investors should continue to assess progress in customer engagement and GenCo advancements to ensure sustained top-line growth.
• Given that InvestingPro suggests the stock is fairly valued, investors should weigh the positive growth prospects against the current valuation and the modest adjustment in Jefferies' price target.