NI
NiSource Inc
$47.07
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.2% above fair value
You pay
$47.07
Bear
$31.63
Fair
$36.15
Bull
$40.67
Bear
$31.63
-32.8%
$1.95 × 14x P/E
Fair
$36.15
-23.2%
$1.95 × 16x P/E
Bull
$40.67
-13.6%
$1.95 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
24.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $51.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $36.15 per share.
Warnings
Dividend-based valuation: $41.16 (above our primary estimate by 32%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $51.00 (from 22 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples