Spire (SR) 26Q1 Update

Spire reported 26Q1 GAAP EPS of $1.54, better than 25Q1’s EPS of $1.34.  Non-GAAP, adjusted EPS was $1.77 vs. $1.34.  I had projected a GAAP and Adjusted EPS of $1.77.  By segment, Gas Utility’s adjusted earnings were $103.9 million, up from $77.8 million, due primarily to higher base rates and the benefit of weather normalization mechanisms.  Gas Marketing’s posted a loss of $2.4 million, down from 25Q1’s $2.4 million profit.  Midstream’s earnings rose 5.8% to $12.7 million.  Other costs were $19.2 million, up from last year’s $10.9 million, due mostly to acquisition-related costs.

Management reaffirmed its fiscal 2026 adjusted EPS guidance of $5.25-$5.35, its fiscal 2027 adjusted EPS guidance of $5.65-$5.85 and its long-term economic EPS growth target of 5%-7%.  My projections anticipate 2026 GAAP EPS of $5.11 and adjusted EPS of $5.35.  My 2026 projections show GAAP EPS of $5.72 and adjusted EPS of $5.75.

Management anticipates that its pending acquisition of the Nashville TN local distribution business of Piedmont Natural Gas will close by the end of March.  The purchase price of $2.48 billion equates to a multiple of 1.55 times projected 2026 rate base.  Piedmont’s Nashville TN business serves 205,000 customers, 91% of which are residential.  Spire says the acquisition will be accretive and supportive of its long-term 5%-7% economic earnings growth target.  The acquisition has received antitrust clearance, but still awaits the approval of the Tennessee Public Utility Commission.  Spire has arranged for $1.725 billion of financing from the issuance of $0.9 billion of junior subordinated notes and Master Note Purchase Agreement for $825 billion of Spite Tennessee Senior Notes.  It expects to fund the remaining $725 million with equity, equity-linked securities and/or proceeds from the sale of its gas storage assets.  Near-term, though, it may close the deal with borrowings under a bridge loan facility.

Spire’s stock surged 22.7% from early September to early November, outperforming the flat performance of the S&P Mid-Cap 400 and Dow Jones U.S. Gas Utility Index’s 4.8% gain.  YTD, Spire’s stock has advanced 10.5%, better than the 4.1% gain in the S&P Mid-Cap 400 and modestly ahead of the Dow Jones U.S. Gas Utility Index’s 9.7% gain.

This rally reflects greater optimism about the outlook for gas utilities and for Spire.  With this move, Spire’s stock has closed its discount and now trades in line with peers.  Spire should take advantage of this revaluation by issuing equity to reduce its debt leverage, which I project will reach about 70% of total capitalization on the closing of Spire Tennessee.  I am raising my price target from $78 to $94, which equates to about 16.4 times projected 2026 GAAP and adjusted (non-GAAP) EPS, in line with the current one-year forward multiple.  The potential total return is 7.0%, including the 3.6% dividend yield; so I am maintaining my performance rating at “3” (Neutral).

This is a summary of my recent update report on Spire Inc. (SR). To obtain a copy of the report, please reach out to me using the contact information provided below.

March 14, 2026 (Report published on March 10, 2026.)

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com

© 2015-2026 by Stephen P. Percoco, Lark Research.   All rights reserved.

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