Pinnacle West Capital Corp
Brokers’ Recommendations for NiSource after Its 2Q16 Earnings
According to Wall Street analysts’ estimates, NiSource (NI) has a one-year median price target of $25.11 compared to its current market price of $25.94.
How Returns Impact Utility Stocks’ Implied Volatility
NRG Energy (NRG) rose 5.1% on a YTD (year-to-date) basis. It has the highest implied volatility of all the utility companies that make up XLU.
NiSource Vastly Outperforms Its Peers in Terms of Total Returns
NiSource has returned a massive 56% in the last 12 months. It has rallied by more than 50% in the last year.
How Is NiSource Valued ahead of Its 2Q16 Earnings?
On July 25, NiSource was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11.2x.
Analyzing NiSource’s Valuation after Its 2Q16 Earnings
On August 2, NiSource was trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11.8x.
Higher Interest Rates Could Be Detrimental to Utilities
Over the past five years, utilities (XLU) have significantly increased their leverage. In fact, this is one of the industries that benefitted from near-zero interest rates.
Why Interest Rates Will Be a Key Indicator for Utilities in 2016
US utilities (IDU) had a dismal performance in 2015 in part due to the fear of higher interest rates.