Spire reported 25Q1 GAAP EPS of $1.34, down from $1.52 in 24Q1. Non-GAAP, net economic EPS (NEEPS) was $1.34, down from $1.47. I had anticipated economic EPS of $1.49. Operating revenues of $669.1 million were down 11.1% YOY and 14.6% below my estimate, mostly due to lower purchased gas adjustments implemented in November.
By segment, Gas Utility economic earnings were slightly improved vs. the prior year, but lower than I expected. Gas marketing earnings were down significantly YOY and vs. expectations. However, management reaffirmed its full year guidance range for the business. Midstream, on the other hand, had significantly better results YOY and vs. expectations, as it benefited from new contracts for capacity and higher rates on contract renewals. Other costs were significantly higher than last year and modestly higher than my projections. Despite the variation in results, management reaffirmed its full year economic earnings guidance of $4.40-$4.60 and its long-term economic EPS growth target of 5%-7%.
In late November, Spire filed a request with the Missouri PSC to raise revenues by $289.5 million to recover delivery system capital investments. It also seeks improved recovery of volumetric revenue from weather and conservation. It issued $32 million in equity from settled forward sales in December and expected another $43 million to settle by 25Q2. Last week, Scott Doyle was named President and CEO, replacing Steve Lindsey, who resigned for health-related reasons.
My projections, which are consistent with guidance, anticipate 2025 GAAP EPS of $4.50 and NEEPS of $4.52, up $0.02 from my previous report. My projections for fiscal 2026 of $4.73 and $4.76, respectively, are essentially unchanged.
Since my last report (10/20), Spire’s stock has risen 5.0%, outperforming the S&P Mid-Cap 400, which is down 16.5%, and the Dow Jones U.S. Gas Utility Index, which is up 3.6%. It has shown good defensive qualities during this period of market turbulence. Its discount vs. peers is now only modest, with a one-year forward multiple of 17.1 vs. peers’ 17.8. Thus, I am raising my price target to $85 from $77, assuming that it will catch up. The new price target equates to a potential total return of 14.4%, including its 4.1% dividend yield, so I am raising my performance rating from “3” (Neutral) to “2” (Outperform).
From a technical point of view, the stock’s recent uptrend was broken in early April with the overall decline in the broader market. It has since recovered a bit, performing in line with the Mid-Cap 400, but underperforming its peer group modestly. A price chart shows that the stock has essentially traded sideways since early March. It may therefore continue to consolidate before moving higher.
This is a summary of Lark Research’s recent report on Spire Inc. (SR). To obtain a copy of the report, please reach out to Steve Percoco using the contact information provided below.
June 20, 2025 (Report published on April 27, 2025.)
Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com
© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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