NI
NiSource Inc
$41.95
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 34.5% above fair value
You pay
$41.95
Bear
$27.30
Fair
$31.20
Bull
$35.10
Bear
$27.30
-34.9%
$1.95 × 14x P/E
Fair
$31.20
-25.6%
$1.95 × 16x P/E
Bull
$35.10
-16.3%
$1.95 × 18x P/E
Adjust Assumptions
16.0x
1.95$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$50.00
Divergence from AlphaVal
38%
Summary
Applying a 16x P/E to adjusted EPS of $1.95, the base-case value is $31.20 per share. DDM cross-check: $42.07.
Warnings
Dividend-based valuation: $42.07 (above our primary estimate by 35%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $50.00 (from 22 analysts). Our estimate is 38% 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