SR - Spire and desire for more upside; initiate Peer Perform

Research evidence excerpt

SR - Spire and desire for more upside; initiate Peer Perform

May 26, 2026

Spire Inc (SR) Snapshot

Exhibit 1: Financial Summary Exhibit 2: Modeling Assumptions

Source: Wolfe Utilities & Power Research, Company Filings; FY ends Sep

Source: Wolfe Utilities & Power Research, Company Filings, FactSet; FY ends Sep

Company Description Exhibit 3: FY27 EPS by Segment

SR is a St Louis-based multistate LDC, with operations MO, AL,

MS, and TN, which was acquired in Mar 2026. SR projects $8.2B

rate base in 2026 and LDCs represent over 90% of EPS. SR’s

FERC-regulated pipeline segment makes up most the rest after

its storage and marketing segments were sold in 2026.

Investment Thesis

We are Peer Perform on the largely gas LDC with 5-7% EPS

growth off FY27 when MO is expected to have rates based on a

future test year. SR’s rate base growth is below nearby pure-play

LDC – OGS – and well below sector-leader ATO; but SR has

minimal equity planned. AL has long been supportive, and TN has

solid mechanisms. The midstream segment could also see upside

from power needs. SR is growing its dividend likely 5%. But SR’s

Source: Wolfe Utilities & Power Research, Company Filings

B/S is below average relative to LDCs and broader utilities. The

hit to SR’s margin from extreme mild weather highlighted that the Exhibit 4: Projected Year-End Rate Base ($M)

recently approved MO weather mechanism still needs

improvement. Due to these factors, we believe that SR will trade

at about 1x discount to our pure-play gas LDCs avg P/E of 15.5x

2028. Our estimates are below 2028-30 consensus, and they

reflect an uplift from MO, which will depend on the outcome of its

first FTY rate filing over the next year. With a lack of near-term

catalysts, we look for a better valuation entry point.

Valuation