On Thursday, a Wells Fargo (NYSE:WFC) analyst updated their financial outlook on Spire Inc. (NYSE:SR), a public utility company, by increasing the stock price target to $66.00 from the previous $64.00. The analyst has chosen to maintain an Equal Weight rating on the stock.
The adjustment in the stock price target comes after the evaluation of Spire's fiscal second-quarter results. The company's performance was influenced by Missouri's weather patterns and fluctuating interest rates, which were partially balanced by the strength in its non-utility operations.
These factors have led to a slight revision in the 2024 earnings outlook for Spire. Despite the tempered forecast, the estimated earnings per share (EPS) range of $4.25 to $4.55 remains unchanged.
The Wells Fargo analyst has revised the 2024 EPS estimate down to $4.28 from the prior estimate of $4.35 while keeping the projections for 2025 through 2028 steady at $4.55, $4.96, $5.02, and $5.35, respectively. This forecast suggests a compound annual growth rate (CAGR) of 5.3% based on the midpoint of the 2024 estimates, which is slightly below Spire's own guidance of a 5-7% growth rate.
The analyst also noted potential for Spire's stock value to increase if the company can achieve higher than the assumed 8% return on equity (ROE) in Missouri by 2026. The report outlines that every 25 basis point improvement in earned ROE could add nearly $0.10 to the company's earnings per share.
InvestingPro Insights
Following the Wells Fargo analyst's updated financial outlook on Spire Inc. (NYSE:SR), it is noteworthy to consider additional insights from InvestingPro. An InvestingPro Tip indicates that Spire has a commendable track record of raising its dividend for 20 consecutive years, demonstrating a strong commitment to shareholder returns. Moreover, the company is characterized by low price volatility, which may appeal to investors seeking stability.
From a financial standpoint, Spire's market capitalization stands at $3.57 billion, with a P/E ratio of 14.99, reflecting investor sentiment on its earnings potential. The company's revenue for the last twelve months as of Q2 2024 is reported at $2.614 billion, with a gross profit margin of 35.55%, indicating a healthy profitability level. Moreover, Spire's dividend yield as of the most recent date is an attractive 4.88%, which is particularly significant given the company's history of dividend growth.
For those interested in a deeper analysis, InvestingPro offers additional tips on Spire's financial health and future outlook. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights. It is also important to note that, according to InvestingPro, there are 6 more tips available that could provide a more comprehensive understanding of Spire's investment profile.
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