BofA Securities analyst Ross Fowler has made adjustments to his ratings for two major energy companies: NiSource Inc (NI) and CenterPoint Energy, Inc (CNP).
For NiSource, Fowler has reinstated a Buy rating, accompanied by a price target of $37. He highlights NiSource’s impressive track record over the past two years, characterized by strong regulatory and financial execution. The company is gaining recognition for its consistency and financial prudence, according to Fowler. The analyst adds that the new senior management team has proven successful, consistently exceeding expectations in various market conditions.
Fowler anticipates capital upside for NiSource from various factors, including the growth of data centers, expected regulatory updates, and the positive outcomes of ongoing rate case resolutions. He also points to the company’s robust balance sheet, which he believes will continue to fuel outperformance. The analyst projects earnings per share (EPS) of $1.72, $1.85, and $2.01 for fiscal years 2024, 2025, and 2026, respectively. These estimates are slightly higher than the current consensus forecasts of $1.73, $1.85, and $1.98.
However, Fowler maintains a Neutral rating for CenterPoint Energy, with a price target of $29. He acknowledges that the company is currently navigating a challenging landscape following its response to Hurricane Beryl. While the direct financial impact of the storm is likely manageable due to Texas’s storm recovery mechanisms, Fowler believes that ongoing investigations and a pending general rate case may hinder a near-term recovery in the company’s valuation. He anticipates EPS of $1.64, $1.74, and $1.85 for fiscal years 2024, 2025, and 2026, which are slightly above the consensus projections of $1.62, $1.73, and $1.86.
Fowler’s analysis offers insights into the evolving dynamics of the energy sector, particularly amidst the challenges posed by extreme weather events and regulatory complexities. The adjustments in his ratings reflect a nuanced understanding of the performance and prospects of both NiSource and CenterPoint Energy.
