Spire (SR) Faces A Pullback, Is The 15% Undervaluation Case Still Intact?
Spire (SR) has drawn investor attention after a recent stretch of mixed share performance, with the utility stock down over the past month and past 3 months despite positive annual revenue and net income growth.
Spire’s recent pullback, with the share price down 5.88% over the past 30 days and 6.48% year to date, contrasts with a 51.33% total shareholder return over three years. This suggests that recent momentum has faded even as longer term holders have still seen solid gains.
Compare Spire’s recent pullback with other utility names that screen for stronger momentum or value traits by scanning our hand picked 31 resilient stocks with low risk scores.
Spire has slipped in the short term even as three year holders still sit on sizeable gains, which leaves a simple fork in the road. Do you step in after this pullback, or wait for a clearer value signal in the valuation work that follows?
Most Popular Narrative: 14.9% Undervalued
Against the latest close at $77.82, the most followed narrative for Spire points to a fair value of $91.40. This implies a valuation gap that hinges heavily on its regulated expansion plan and capital spending profile.
The acquisition of Piedmont Natural Gas Tennessee, which added about 200,000 customers and US$1.6b of rate base funded without common equity, can give Spire more regulated revenue and wider earnings contribution once new customer and infrastructure investments are fully reflected in rates and margins.
See why 0 investors see Spire as 15% undervalued.
Result: Fair Value of $91.40 (UNDERVALUED)
Still, Spire’s story can break if regulators push back on its US$11.2b spending plan, or if electrification trends bite into long term gas demand.
Find out about the key risks to this Spire narrative.
Next Steps
Mixed views on Spire’s valuation and risk profile only matter if you stress test them yourself, then weigh both sides using the 3 key rewards and 2 important warning signs.
Looking for more Spire sized investment ideas?
If you stop at Spire, you risk missing other opportunities with different risk, income, and value profiles that could round out your portfolio.
- Target steadier rides by scanning a curated set of resilient contenders through the 31 resilient stocks with low risk scores.
- Hunt for potential mispricings by running through the hand picked pool of 29 high quality undervalued stocks.
- Build income first, then price upside second, by zeroing in on companies in the 8 dividend fortresses.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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