Utilities Select Sector

S&P 500

The Balanced Allocator

Comparable Companies - NI

0 discretionary insider purchases and 8 discretionary insider sales; latest short interest 1.8% of float as of 2026-02-13; primary institutional filers include Vanguard Group Inc. at 13.0%, BlackRock Inc. at 10.8%, T. Rowe Price Investment Management Inc. at 10.7%.

SVP CHIEF ACCTING&TAX OFFICER

EVP & CFO

EVP, GC & CORPORATE SECRETARY

EVP ADMINISTRATION & CHRO

DIRECTOR AND PRESIDENT & CEO

DIRECTOR

Passive investment held in ordinary course of business with no intent to change or influence control of NiSource Inc.

Announced retirement in October 2025; will remain CEO until July 2026 to ensure a smooth transition.

President and Chief Executive Officer

Named successor to Lloyd Yates as President and CEO effective August 2026.

President, NiSource (Incoming CEO)

Continues to lead the six-state utility operations; previously served as Chief Innovation Officer.

Executive Vice President and Group President, NiSource Utilities

Assumed additional Investor Relations oversight in March 2025 following the departure of the IR lead.

Executive Vice President and Chief Financial Officer

Maintains oversight of operational excellence and safety protocols.

Executive Vice President and Chief Operating and Safety Officer

Role expanded to include strategy and risk management oversight.

Executive Vice President of Technology, Customer and Chief Commercial Officer

Verified as current lead for legal and corporate governance.

Executive Vice President, General Counsel and Corporate Secretary

Verified as current lead for human capital and administration.

Executive Vice President of Administration and Chief Human Resources Officer

Verified as current principal accounting officer.

Vice President, Chief Accounting Officer and Controller

Investor Relations leadership transitioned to Shawn Anderson (CFO) on an interim basis in early 2025.

Not Found

Lloyd Yates

Melody Birmingham

Shawn Anderson

Kevin Kabat

Peter Altabef

Lloyd Yates' tenure at NiSource is defined by a 'pure-play' regulated utility strategy and aggressive balance sheet management. His provenance as a veteran of Duke Energy provided the operational credibility needed to navigate NiSource through its post-crisis recovery. By executing the $2.16 billion NIPSCO stake sale to Blackstone, he successfully secured low-cost equity to fund a $28 billion five-year capital plan without significant shareholder dilution. His planned retirement in 2026 marks the conclusion of a transformative period that shifted the company's focus toward high-growth data center infrastructure and renewable transition.

Sale of 19.9% minority interest in NIPSCO to Blackstone Infrastructure Partners

Strategic Data Center Infrastructure Agreement with Amazon

Melody Birmingham is a highly experienced utility operator with a specialized focus on the Indiana regulatory landscape, which is NiSource's most critical growth territory. Her transition from Chief Innovation Officer to Group President of Utilities signals her central role in the company's 'NiSource Next' transformation. Her prior success at Duke Energy Indiana in managing large-scale infrastructure modernization programs serves as a direct blueprint for NiSource's current $28 billion long-term investment strategy. She is widely viewed as a key internal candidate for future top-tier leadership roles given her P&L responsibility over the company's entire utility portfolio.

Oversight of NiSource's $15 Billion 2023-2027 Capital Plan

Sondra Barbour

Theodore Bunting Jr.

Eric Butler

Deborah Henretta

Deborah Hersman

Michael Jesanis

William Johnson

Cassandra Lee

John McAvoy

Atmos Energy Corporation is a natural gas-only distributor serving approximately 3.4 million customers across eight states in the South and Midwest, with a focus on safe, reliable, and efficient service through regulated sales and transportation arrangements.

Regulated natural gas distribution and related sales operations in eight states.

Pipeline and storage operations of Atmos Pipeline-Texas Division and natural gas transmission operations in Louisiana.

CMS Energy, through its subsidiary Consumers Energy, provides electric and natural gas utility services to customers in Michigan, with a focus on safety, reliability, affordability, and clean energy transition.

Electric generation, transmission, and distribution services in Michigan.

Natural gas distribution and transmission services in Michigan.

NorthStar Clean Energy, which develops and operates renewable energy projects.

Consolidated Edison Inc. is a regulated electric and gas utility serving customers in New York and New Jersey, with a focus on clean energy transition and grid modernization.

Consolidated Edison Company of New York, providing electric and gas service in New York City and Westchester County.

Orange & Rockland Utilities, providing electric and gas service in New York and New Jersey.

Electric transmission projects and investments.

Entergy Corporation is a regulated electric utility operating in the Gulf South region, with a focus on customer service, reliability, and clean energy transition.

Electric generation, transmission, and distribution in the Gulf South.

Natural gas distribution in the Gulf South.

NiSource owns the 325,000-square-foot Southlake Complex headquarters in Merrillville, Indiana, and operates extensive utility infrastructure including approximately 54,600 miles of natural-gas distribution mains, 1,000 miles of transmission pipelines, coal-fired, combined-cycle, hydro, wind, solar and battery-storage generation facilities, and associated electric transmission and distribution assets across its service territories.

NiSource's financial story features regulatory-driven revenue growth to $6.64B (21.8% YoY) and strong cash conversion at 2.54x net income, but is undermined by gross margin compression to 76.1%, CapEx at 47.5% of revenue yielding ROIC of 2.1%, Debt/Equity at 171.6%, and dilution from 4.1% share count growth with no buybacks; the current team under CEO Yates excels in external experience (Duke utility ops, key deals) and board oversight (utility experts), but weak capital allocation (sub-CoC ROIC, poor issuance timing) and adequate incentives (generic EPS focus) limit alignment, rendering management adequate yet mismatched for accelerating per-share value in a high-reinvestment utility.

The company faces material risks from environmental regulations, including those related to greenhouse gas emissions, coal combustion residuals (CCR), and state-level policies like Maryland's Climate Solutions Now Act. Compliance costs, potential penalties, and remediation liabilities are significant, with uncertainty regarding future regulations and their recoverability through rates. Specific issues include EPA rules on CCR and GHG, Maryland's building performance standards, and potential stranded asset risks from climate policies.

As of December 31, 2025, the company had 7,668 full-time and 70 part-time active employees, with 32% covered by collective bargaining agreements. The company emphasizes safety programs and faces risks related to attracting and retaining talent in a competitive labor market.

The company focuses on delivering safe and reliable energy to customers, with programs to enhance customer experience and satisfaction. Customer service and reliability are key priorities, measured through customer satisfaction surveys. Data privacy and security are managed through cybersecurity programs, including incident response plans and third-party risk management.

The company faces supply chain risks and outsources various functions to third-party suppliers, with efforts to manage vendor performance and cybersecurity. Community engagement includes data center development initiatives aimed at enhancing local tax bases and employment diversity. Political contributions are made through the NiSource Political Action Committee (NiPAC), and stakeholder engagement is emphasized in governance practices.

Revenue surged 21.8% YoY to $6.64 B driven by $324 M of rate approvals and weather normalization, but gross margin fell 3.1 percentage points to 76.1% and capex consumed 47.5% of revenue, pushing debt to 45% of assets and Debt/Equity to 171.6%.

The 2025 MD&A outlines a $21 B base utility capex plan over five years, a $6‑7 B GenCo investment program, and $2 B of upside projects, with the current FY 2025 spend focused on system growth, generation‑transition (new CCGTs, battery storage) and data‑center support assets.

The 10‑K reports no material impairment charges for FY 2025, and the auditor did not flag any impairment as a Critical Audit Matter, indicating that the asset base reflects economic reality rather than accounting fiction.

Investments are directed toward generation‑transition (CCGTs, battery storage), grid modernization, and data‑center assets, yet the low ROIC indicates these projects are not generating returns above the weighted‑average cost of capital.

Junior Subordinated Notes - 5.750% Fixed-to-Fixed Reset due 2056

Junior Subordinated Notes - 6.950% Fixed-to-Fixed Reset due 2054

Junior Subordinated Notes - 6.375% Fixed-to-Fixed Reset due 2055

EV/EBITDA

William Jefferson

Deborah A. Henretta

Deborah A. P. Hersman

Eric L. Butler

Kevin T. Kabat

Peter A. Altabef

Sondra L. Barbour

Theodore H. Bunting, Jr.

Cassandra S. Lee

Lloyd M. Yates

Michael E. Jesanis

William D. Johnson

Deborah A.P. Hersman

William Jefferson, Jr.

Kevin K. Kabat

Michael Luhrs

Each share entitled to one vote on each matter presented at the Annual Meeting.

Ratification of Deloitte & Touche LLP as independent registered public accounting firm for 2025

Stockholder proposal requesting to support special shareholder meeting improvement

Transact such other business as may properly come before the Annual Meeting

Durgesh Chopra

Vice President of Investor Relations

Gunnar J. Gode

Vice President, Chief Accounting Officer & Controller

President, Chief Executive Officer & Director

Executive Vice President of Technology, Customer & Chief Commercial Officer

Executive VP & CFO

Executive VP & Chief Operating and Safety Officer

Angela Sanchez

Vice President of Communications

Kimberly S. Cuccia

EVP, General Counsel & Corporate Secretary

Melanie Berman

EVP of Administration & Chief Human Resources Officer

Executive VP & Group President of NiSource Utilities

NiSource Inc. is an energy holding company organized under the Public Utility Holding Company Act of 2005. Its primary subsidiaries are fully regulated natural gas and electric utility companies that serve approximately 2.4 million residential, commercial and industrial customers across six states (Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana). The company delivers safe, reliable energy, operates gas distribution pipelines, electric generation, transmission and distribution assets, and provides ancillary services such as on-system gas transportation and balancing.

Provides natural gas distribution to approximately 2.4 million customers in Ohio, Pennsylvania, Virginia, Kentucky and Maryland and operates associated transmission pipelines and storage facilities.

Delivers regulated natural gas and electric service in northern Indiana, including generation, transmission and distribution of electricity and gas.

Held base growth, 10.0% WACC, and 10.0x terminal multiple constant; solved for required FCFF on 7964.2M TBV to match 46.39 price and 38.59B EV.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - NI

The utility sector is experiencing a 'renaissance' driven by data center load and the energy transition, but this has led to a peak capital cycle. NiSource's capex-to-revenue ratio of 47.5% is among the highest in its peer group, signaling a loosening of capacity discipline that historically precedes multiple contraction.

NiSource is at a critical juncture following a 33% EPS beat and the formalization of the Amazon GenCo strategy, making it a timely candidate for a 'sell the news' analysis as the market prices in growth while ignoring balance sheet strain.

Realization of GenCo generation capacity and Amazon contract revenue. This addresses market skepticism regarding the timing of earnings versus the massive upfront capex outlays.

Regulatory approval of the Amazon data center agreement by the IURC. Validation of the GenCo model by regulators is critical to ensuring cost recovery and protecting the retail rate base.

High leverage and rising interest rates impairing dividend flexibility. With a 171.6% Debt/Equity ratio and 5.5x Net Debt/EBITDA, any increase in financing costs directly erodes the slim 2.8x interest coverage.

Regulatory denial or delays in GenCo cost recovery. If the IURC or other state regulators do not approve the GenCo structure, the $7B in incremental investment could become stranded or dilutive to retail customers.

The governance structure is robust with high independence, but the lack of 'skin in the game' is concerning. The Governance Outcome Tree suggests: 1. Status Quo (Hooper executes the $28B plan, likely leading to further dilution); 2. Compromise (Blackstone increases its influence to protect its 19.9% NIPSCO stake); 3. Reset (A strategic review or utility breakup if GenCo returns fail to materialize). Currently, the...

The current asset base of NiSource Inc. consists of extensive regulated utility infrastructure across six states. This includes 54,600 miles of natural gas distribution main pipelines and 1,000 miles of transmission pipelines serving 3.25 million customers. The electric utility segment includes 3,000 circuit miles of transmission lines, 312,500 poles, and 305 substations. The generation portfolio as of late 2025 comprises 3,967 MW of capacity, including 1,177 MW of coal (slated for retirement), 665 MW of combined-cycle gas turbine (CCGT) capacity at Sugar Creek, and a rapidly expanding renewable portfolio of 2,100 MW nameplate solar and wind capacity. Recent transcript data confirms the addition of the 2.4 GW Amazon data center load project and the associated GenCo expansion, which includes two 1,300 MW CCGT units and 400 MW of battery storage currently under construction or in advanced development.

Enbridge Inc. acquired three natural gas utilities from Dominion Energy (The East Ohio Gas Company, Questar Gas, and Public Service Company of North Carolina) for approximately $14,000,000,000.

Blackstone Infrastructure Partners acquired a 19.9% non-controlling equity interest in Northern Indiana Public Service Company (NIPSCO), a NiSource subsidiary, for $2,150,000,000.

Cash & Equivalents

Accounts Receivable

NiSource's inventory is dominated by natural gas in storage ($252,000,000), which is a highly fungible commodity. Because NiSource operates under regulated rate structures, it typically has mechanisms to recover gas costs from customers, making the inventory value exceptionally stable. The materials and supplies ($189,000,000) consist of pipes, valves, and transformers that have limited secondary markets but are essential for any operator of the system, supporting a moderate recovery rate even in liquidation.

Inventory

Other Current Assets

Net PP&E

Intangibles

Long-Term Inv.

Other Non-Current

Accounts Payable

Current Debt

Other Current Liabilities

Non-Current Debt

Deposits

Tax Liabilities (Deferred)

Other Non-Current Liabilities

Market/Sector Move -5.02%

NiSource price target raised to $50 from $49 at BMO Capital

NiSource price target raised to $48 from $45 at UBS

NiSource price target lowered to $45 from $46 at Barclays

NiSource price target raised to $50 from $44 at Mizuho

NiSource initiated with an Overweight at Wells Fargo

NiSource initiated with an In Line at Evercore ISI

NiSource price target raised to $49 from $47 at BMO Capital

NiSource price target raised to $46 from $44 at Barclays

NiSource price target raised to $47 from $46 at BMO Capital

Situation: Current price is $47.04 versus fair value $36.16 (-23.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Realization of GenCo generation capacity and Amazon contract revenue. Bear case centers on High leverage and rising interest rates impairing dividend flexibility. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

Executive Summary

NiSource is leveraging its regulated monopoly to fund a massive $28B five-year capital plan, including a landmark 2.4 GW data center agreement with Amazon. While this drives top-line growth, the high capital intensity and 5.5x Net Debt/EBITDA leverage create a precarious financial profile where reinvestment returns fail to meet the cost of capital.<ul><li>Driver: Regulatory rate base expansion and GenCo infrastructure development.</li><li>Catalyst: Realization of GenCo generation capacity and Amazon contract revenue.</li><li>Protection: Durable regulatory monopoly and a $28.7B tangible asset base.</li></ul>Our variant perception is that the market is obsessing over the 'data center' growth narrative, missing the massive discount to Net Asset Value (NAV) implied by the company's sub-hurdle returns. We view this not as an earnings growth story, but as a capital-intensive cycle where the liquidation value of the equity is effectively zero due to $16.2B in debt, providing no hard floor for common shareholders at current prices.This is a bet on the market's eventual realization that regulatory growth without efficient capital allocation is dilutive. We are fading the utility 'AI hype' cycle, as the company's 2.1% ROIC indicates that every dollar of the $3.16B in annual capex is destroying shareholder value.

Core Investment Rationale

NiSource operates as a pure-play regulated utility, distributing natural gas to 3.25 million customers across six states and providing electric services to 483,000 customers in Northern Indiana. The strategy is centered on 'Your Energy, Your Future,' a transition plan focusing on grid modernization and renewable generation. Revenue is primarily derived from regulated rate cases, which added $324.2M to the top line in FY2025. The company is currently pivoting toward a 'GenCo' model, which separates generation assets to serve large industrial and data center loads, such as the 2.4 GW Amazon project, without burdening the existing retail rate base.The company's value is anchored in its extensive physical infrastructure, with PP&E comprising 80% of total assets. Key assets include 54,600 miles of natural gas distribution mains, 1,000 miles of transmission pipelines, and a generation portfolio of 3,967 MW. The electric segment includes 3,000 circuit miles of transmission lines and 305 substations. The GenCo expansion adds two 1,300 MW combined-cycle gas turbines and 400 MW of battery storage, supported by a $1.5B equity commitment from Blackstone Infrastructure Partners.NiSource operates in a rational, non-price-war environment defined by geographic monopolies. Key peers include Atmos Energy, CMS Energy, and Consolidated Edison. While NiSource's 76.1% gross margin exceeds the peer median of 47.4%, its 2.1% ROIC is significantly lower than the peer average of 4.5%. The industry is currently in a peak capital cycle, with capex intensities (47.5% for NiSource) far exceeding revenue growth across the sector.NiSource's recent history is defined by its recovery from the 2018 Columbia Gas incident and its subsequent strategic pivot. Under CEO Lloyd Yates, the company sold a 19.9% stake in its NIPSCO subsidiary to Blackstone for $2.15B in 2024 to de-lever and fund its renewable transition. However, the situation has become increasingly complex with the announcement of Yates' retirement effective July 2026. The incoming CEO, Mike Hooper, inherits a $28B five-year capex plan and a balance sheet with $16.2B in debt. This leadership transition occurs just as the company begins the execution of its massive Amazon data center contract, introducing significant execution risk during a period of peak capital intensity.

Business & Situation

<ul><li>Bull Case: Landmark 2.4 GW Amazon data center contract projected to add $0.10-$0.15 to EPS by 2030; 8-9% projected EPS CAGR through 2033 supported by a $28B capital plan; strong institutional buying with 14.8M shares added in Q4 2025.</li><li>Bear Case: Value-destructive reinvestment with 2.1% ROIC and 3.0% incremental ROIC vs. 10% WACC; high leverage at 5.5x Net Debt/EBITDA and 171.6% Debt/Equity; persistent negative free cash flow of -$793.8M due to aggressive capex.</li></ul>The market currently views NiSource as a prime beneficiary of the data center power demand surge. The stock trades at 24.2x P/E, a premium to its 5-year average of 20.5x, as investors price in the 2.4 GW Amazon deal and the potential for a multi-gigawatt pipeline in Northern Indiana. This optimism is bolstered by a 33% EPS beat in the most recent quarter and management's reaffirmation of an 8-9% EPS CAGR through 2033.The utility sector is experiencing a 'renaissance' driven by data center load and the energy transition, but this has led to a peak capital cycle. NiSource's capex-to-revenue ratio of 47.5% is among the highest in its peer group, signaling a loosening of capacity discipline that historically precedes multiple contraction.Our differentiated view is that the market is mispricing the quality and stability of the asset's cash flows due to an overblown focus on top-line growth. While revenue grew 21.8% in FY2025, gross margins compressed by 310 basis points to 76.1%, indicating that input costs and depreciation are outstripping pricing power. Furthermore, the 2.1% ROIC proves that management is destroying roughly 8 cents of value for every dollar reinvested. The ongoing CEO transition and $2.74M in insider sales suggest that those closest to the business are less sanguine about this capital-intensive pivot than the market.The debate between 'growth at any cost' and 'capital efficiency' favors the latter in a high-interest-rate environment. NiSource's negative free cash flow and 171.6% Debt/Equity ratio leave no room for execution errors in the GenCo rollout. We believe the stock is priced for perfection in a situation that is fundamentally dilutive.Our analytical edge is a more detailed understanding of the capital cycle and the specific return on invested capital (ROIC) metrics that the market is ignoring in favor of headline data center announcements. By reconciling the $12.5B in historical capex against the 3.0% incremental ROIC, we identify a structural value leak that consensus models have yet to incorporate.

Core Thesis

CEO Lloyd Yates, a veteran of Duke Energy, has successfully stabilized NiSource's regulatory relationships and executed the $2.15B Blackstone stake sale. However, his tenure has also seen a 21.8% increase in share count and $2.2B in dilutive equity issuances. His retirement in July 2026, with Mike Hooper named as successor, creates a 'lame duck' period during the most critical phase of the GenCo rollout.Capital allocation skill is weak. The company has generated an incremental ROIC of only 3.0% on $12.5B of capex, while executing $2.2B in stock issuances at poor timing, with trade ROIs ranging from -8.7% to -105.9%.Management's credibility is moderate. While they consistently hit revenue targets (80% hit rate), they have only hit EPS estimates 40% of the time over the last five years. The claim of 'flat O&M' is contradicted by the 3.1% drop in gross margins in FY2025.<ul><li>Board Independence: 92% (11 of 12 directors)</li><li>Chairman/CEO Roles: Separate</li><li>Chairman Tenure: 6 years (since 2020)</li><li>Insider Ownership: 0.11% (CEO Lloyd Yates)</li><li>Shareholder Rights: Proxy Access (3%/3yr), 10% Special Meeting Right</li></ul>The governance structure is robust with high independence, but the lack of 'skin in the game' is concerning. The Governance Outcome Tree suggests: 1. Status Quo (Hooper executes the $28B plan, likely leading to further dilution); 2. Compromise (Blackstone increases its influence to protect its 19.9% NIPSCO stake); 3. Reset (A strategic review or utility breakup if GenCo returns fail to materialize). Currently, the status quo path dominates, which we view as bearish for equity holders.

Leadership & Governance

The valuation floor is anchored to the Net Liquidation Value of $0.00. Given the company's $16.2B in debt and $24.2B in total liabilities, a distressed liquidation of the $28.7B in PP&E at a conservative 50% recovery (low case) would result in a zero-equity outcome.Base case assumes 6% revenue growth and 27.5% operating margins, reflecting guided EPS growth and regulatory execution, but results in non-positive free cash flow through 2030.Bull case assumes 8% revenue growth and 28.5% margins from a flawless GenCo rollout and Amazon contract realization, implying a Blue-Sky Potential of $18.80 per share.The bear case is anchored to the Net Liquidation Value (NLV) of $0.00. If regulatory delays or cost inflation impair the $28B capex plan, the high leverage profile creates a risk of total equity impairment, as the market would price the stock on its distressed asset value.

Valuation Context

<ul><li>Realization of GenCo generation capacity and Amazon contract revenue. This addresses market skepticism regarding the timing of earnings versus the massive upfront capex outlays.</li><li>Regulatory approval of the Amazon data center agreement by the IURC. Validation of the GenCo model by regulators is critical to ensuring cost recovery and protecting the retail rate base.</li><li>NiSource is at a critical juncture following a 33% EPS beat and the formalization of the Amazon GenCo strategy, making it a timely candidate for a 'sell the news' analysis as the market prices in growth while ignoring balance sheet strain.</li></ul>NiSource is at a critical juncture following a 33% EPS beat and the formalization of the Amazon GenCo strategy, making it a timely candidate for a 'sell the news' analysis as the market prices in growth while ignoring balance sheet strain.

Catalyst Path & Context

<ul><li>High leverage and rising interest rates impairing dividend flexibility. With a 171.6% Debt/Equity ratio and 5.5x Net Debt/EBITDA, any increase in financing costs directly erodes the slim 2.8x interest coverage. Interest expense rose to $639M in FY2025, and the company has $1.15B in debt maturing in 2027.</li><li>Regulatory denial or delays in GenCo cost recovery. If the IURC or other state regulators do not approve the GenCo structure, the $7B in incremental investment could become stranded or dilutive to retail customers. The GenCo model is a relatively new regulatory framework in Indiana, and the Amazon deal is still pending final approval.</li><li>The governance structure is robust with high independence, but the lack of 'skin in the game' is concerning. The Governance Outcome Tree suggests: 1. Status Quo (Hooper executes the $28B plan, likely leading to further dilution); 2. Compromise (Blackstone increases its influence to protect its 19.9% NIPSCO stake); 3. Reset (A strategic review or utility breakup if GenCo returns fail to materialize). Currently, the... Risk monitor: Current price $47.04 vs fair value $36.16, expected return -23.1%.</li></ul>

Primary Risks

<ul><li>Entry Target: No new entries: recommendation is Sell.</li><li>Stop Loss: No stop-loss needed because recommendation is Sell (no position).</li><li>Position Size: Position size is None under current recommendation and risk constraints.</li><li>Time Horizon: N/A for a Sell recommendation.</li></ul><ul><li>Management confirmed in the FY2025 Q4 call that GenCo construction is underway for 3 GW of capacity, with Amazon project zoning already approved.</li><li>The Amazon deal is currently pending IURC decision, with Indiana HB 1002 viewed as a supportive legislative tailwind.</li><li>Interest expense rose to $639M in FY2025, and the company has $1.15B in debt maturing in 2027.</li></ul>A permanent regulatory shift in Indiana or Ohio that prevents cost recovery on the $28B five-year capital plan, leading to a stranded asset scenario. Also require valuation reliability to improve before re-entering.

Actionable Parameters & Monitoring

NI appears overvalued (fair value $36.16 vs current $47.04, expected return -23.1%). Recommendation: Sell; do not allocate until valuation and risk profile reset.

Final Conclusion

Regulatory rate base expansion and GenCo infrastructure development.

Driver

Realization of GenCo generation capacity and Amazon contract revenue.

Catalyst

Durable regulatory monopoly and a $28.7B tangible asset base.

Protection

Landmark 2.4 GW Amazon data center contract projected to add $0.10-$0.15 to EPS by 2030; 8-9% projected EPS CAGR through 2033 supported by a $28B capital plan; strong institutional buying with 14.8M shares added in Q4 2025.

Bull Case

Value-destructive reinvestment with 2.1% ROIC and 3.0% incremental ROIC vs. 10% WACC; high leverage at 5.5x Net Debt/EBITDA and 171.6% Debt/Equity; persistent negative free cash flow of -$793.8M due to aggressive capex.

Bear Case

Situation: Current price is $47.04 versus fair value $36.16 (-23.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Realization of GenCo generation capacity and Amazon contract revenue. Bear case centers on High leverage and rising interest rates impairing dividend flexibility. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

The strategy evolved from a foundational focus on operational excellence, regulatory settlements, and AI-driven cost discipline to a decisive pivot toward large-scale, external growth via the GenCo (generation company) model to serve hyperscaler data center demand, while maintaining base business affordability commitments.

Method	Implied Value	Weight	Weighted Value
Comps	$39.21	65%	$25.49
Historicals	$30.49	35%	$10.67
Total Weighted			$36.16

NI

Company Overview

Price History