Don’t Dismiss NiSource Inc. (NI) Stock So Quickly

NiSource Inc. (NYSE:NI) has been upgraded by Guggenheim, which now rates the stock as Buy versus Neutral prior rating, according to a note issued on January 07. Analysts at Mizuho, shed their positive views on October 19 by lowering it fromBuy to Neutral. The stock lost favor of Evercore ISI analysts who expressed their lack of confidence in it using a downgrade from In-line to Underperform on September 14.

NI stock dropped -0.39% in recent trade and currently has a stock-market value of $10.32B. The shares finished at $27.87, after trading as low as $27.83 earlier in the session. It hit an intraday high Thursday at $28.075. Trading activity significantly weakened as the volume at ready counter decreased to 2,828,336 shares versus 3,345,670 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,040,848 shares. The stock is now 20.96% above against its bear-market low of $23.04 on March 23, 2018. It has retreated -0.93% since it’s 52-week high of $28.13 reached in March. Now the market price is up 20.44% on the year and up 9.94% YTD.

Wall Street’s most bullish NiSource Inc. (NYSE:NI) analysts are predicting the share price to blow past $30 per share during the next 12 months. The current median share price forecast by them is $28.5, suggesting that the stock could increase 2.26% in that time frame. The average price target of $28 calls for a nearly 0.47% increase in the stock price.

NiSource Inc. (NI)’s 50 day simple moving average (SMA 50) price is $26.65 and its 200-day simple moving average (SMA 200) price is $26.08. The company’s stock currently has a total float of 370.32M shares. Its weekly volatility is hovering around 1.05% and felt 1.42% volatility in price over a month. On the upside, the share price will test short term resistance at around $28.02. On a downside, the stock is likely to find some support, which begins at $27.77. The failure to get near-term support could push it to $27.68.

Moreover, it trades for 19.92 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.11x price/book and 2.02x price/sales. Compared to others, NiSource Inc. is in a different league with regards to profitability, having net margins of -1.3%. To put some perspective around this, the industry’s average net margin is 40.61%. NI’s ROE is -1.4%, which is also considerably worse than the industry’s ROE of 13.75%. It’s also not liquid in the near term, with a current ratio of 0.5. The stock has a debt/capital of 1.87.

Shares of NI have gained 3.9% since the company’s most recent earnings report. Over the past 12 fiscal quarters, NiSource Inc. (NYSE:NI) has topped consensus earnings estimates in 5 quarters (41%), missed earnings in 3 quarters (25%), whereas at 4 occasion EPS met analyst expectations. NI last reported earnings that exceeded expectations. The company raked in $0.38 per share, -92.45% change on the same period last year. That was better than consensus for $0.36. Revenue for the recent quarter stood at $1.46 billion, up 7% on last year and above the $1.42 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.76 billion to $1.86 billion, which should be compared with $1.8 billion generated last year. EPS is seen in a range of $0.72 to $0.86, against the $0.79 reported a year ago.