Black Hills Corp: BKH: Upgrade to Buy on merger and data center value creation opportunity

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Black Hills Corp: BKH: Upgrade to Buy on merger and data center value creation opportunity

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Black Hills Corp

BKH: Upgrade to Buy on merger and data

center value creation opportunity

Rating Change: BUY | PO: 78.00 USD | Price: 71.94 USD

Disruption forces better visibility in Wyoming 11 June 2026

We upgrade Black Hills Corp (BKH) to Buy from Neutral. We expect the pending all-stock Equity

merger with NorthWestern Energy (NWE) to close and see the strategic value as

underappreciated, with the combination offering greater scale, a stronger balance sheet,

Key Changesbroader jurisdictional diversity and a larger infrastructure runway across data centers,

transmission, generation and gas. Montana remains the critical approval path, but with a (US$) Previous Current

settlement in hand and the application appearing to satisfy the statutory approval Inv. Opinion B-2-7 B-1-7

requirements, we believe merger risk is manageable and that the stock does not reflect Inv. Rating NEUTRAL BUY

the potential EPS growth, financing and valuation benefits of the combined platform. Price Obj. 76.00 78.00

2026E DPS 2.80 2.81

Wyoming data centers: early and noisy, but not over

Wyoming is emerging as a credible, but underappreciated, data center market, with Ross Fowler, CFA

Research Analyst

active sites, additional development underway and broad political/regulatory support for BofAS

large-load growth. Project Jade is the most visible opportunity: a roughly 1.8 GW campus +1 646 855 1506 ross.fowler@bofa.com

with material expansion potential that we view as progressing versus paused. BKH’s F. Paul Cole

ring-fenced LPCS tariff provides a path to earn on both company-owned and customer- Research Analyst