2025-06-10-Jefferies-尼源公司（NI）_发电公司势头增强_数据中心公告按计划推进_房地产投资信托基金_买入_16页_487kb

NiSource Summary

Core Content

NiSource (ticker: NI) is a utility company with a strong position in the energy sector, particularly in data center and renewable energy development. The company is currently maintaining its Buy rating with a Price Target of $45.00, indicating a potential +14% return from the current share price of $39.35. The analysis highlights the company's progress in GenCo and its strategic focus on data center growth, while also addressing regulatory and policy uncertainties that may affect its long-term plans.

Main Points

1. GenCo and Data Center Progress

• GenCo is a key initiative for reducing regulatory delays and enabling faster response to future data center demand.
• The July 1st hearing is a pivotal event for the GenCo settlement, with the IURC showing support by upholding the hearing date.
• Data center announcements are expected in 2Q/3Q 2025, but the timeline remains fluid as customers refine their demand curves for 2026–2029.
• The company continues to engage with around 30 large-load customers, indicating sustained interest and visibility into future growth.

2. Earnings and Growth Forecasts

• EPS CAGR for 2025–2029 is projected at 9.2%, above the 8.1% consensus and 8.0% guidance top end.
• 2025E EPS is forecasted at $1.88, aligning with the consensus.
• Rate base growth is expected to accelerate, with a forecasted increase from $23.056B in 2025 to $29.858B in 2028.

3. Valuation and Premiums

• The company is valued at ~18x 2027E P/E, with a ~13% premium to electric peers.
• A +30% premium is applied to NIPSCO due to data center growth and favorable regulatory outcomes.
• A +15% premium is assigned to Columbia gas in Pennsylvania and Ohio, while a -5% discount is applied to Columbia gas in Maryland and Virginia due to regulatory pressures.

4. Coal Retirement and New Generation

• Coal extension is less viable due to high costs and limited remaining run time.
• The company is committed to retiring all coal-fired generation by 2028, with a long-term goal of achieving Net Zero emissions by 2040.
• Management emphasizes that any cost recovery from coal extensions would require regulatory approval and ultimately be passed on to customers.

5. IRP Execution and Renewable Transition

• IRP (Integrated Resource Plan) includes ~644MW of storage and ~5Bn in upside capex.
• The reconciliation bill poses a risk to renewable projects, as it could disallow ITC eligibility and transferability for projects not online by December 31, 2028.
• Storage safe harboring is more complex due to integration and degradation risks, with most developers only comfortable with 1–2 years of safe harbor.
• NI is likely to continue partnering with large-scale developers like NextEra Energy (NEE) for renewable projects.

6. Gas as a Growth Driver

• Natural gas remains a key growth driver, with ~9% base CAGR for 2025–2029.
• Four of six IRP portfolios include 2.6GW–3.2GW of CCGT (Combined Cycle Gas Turbines), and a shift to gas may be plausible amid IRA policy uncertainty.
• Gas infrastructure is increasingly relevant due to data center backup generation needs.

7. Risk Factors and Uncertainties

• IRA policy uncertainty may delay or alter renewable projects, particularly those involving storage.
• O&M costs are expected to normalize, with the 1Q 2025 increase attributed to specific initiatives like vegetation management and leakage control.
• The $1.25Bn LT note refinancing in August could increase interest expenses, but management has already factored updated assumptions into guidance.

Key Financial Highlights

Catalysts and Outlook

• Positive outcome from the July GenCo hearing is a key catalyst.
• Data center announcements in 2Q/3Q 2025 are expected.
• IRP execution and reconciliation bill outcomes will significantly impact renewable and storage projects.
• NIPSCO rate case by mid-2025 is a key event for visibility and earnings.
• Regulatory support for GenCo and data centers is a strong enabler of growth and valuation upside.

Sustainability and Long-term Goals

• Net Zero emissions by 2040 and coal retirement by 2028 are core sustainability goals.
• Water management targets a 99% reduction in withdrawals and discharge from 2005 levels by 2030.
• Air quality targets include 99% reduction in nitrogen oxides, sulfur dioxide, and mercury emissions.

Investment Thesis

• NiSource is positioned to benefit from data center growth, renewable transition, and favorable regulatory outcomes.
• The company's disciplined approach to O&M and capital allocation has enabled ~8.5% growth since 2021.
• Valuation upside is supported by GenCo progress and data center visibility.
• The Buy rating reflects confidence in the company's execution capabilities and strategic positioning.

Conclusion

NiSource is well-positioned for growth and re-rating, with strong traction in data centers, efficient GenCo execution, and favorable regulatory support. Despite uncertainties around IRA policy and renewable tax credits, the company's disciplined approach and strategic partnerships reinforce its long-term potential. The July 1st hearing and data center announcements are key events that could drive above-consensus earnings and value creation.