NI: Sounding confident on home base; mgmt. meeting

Research evidence excerpt

NI: Sounding confident on home base; mgmt. meeting

June 21, 2026

Investment Conclusion

We are Outperform rated on NI. NI’s rate base growth of 8-10% from the base plan & 9-11% with GenCo as

well as EPS growth of 6-8% annually through 2030 from the base plan & 9-10% at the consolidated level through

2033 (tracking towards the high-end through 2030) places it amongst the better growth stories in the sector. The

majority (~85% recovered in 0-12 months) of NI's capex runs through trackers/riders, so it gets real time recovery

of its investments which results in less regulatory lag. The company's expansive renewables build out at NIPSCO

electric and fact that it could be coal-free by the end of 2028 is also helpful from an ESG standpoint. Execution on the

regulatory front has also generally been pretty good at the company in its core states, evidenced by settlements and

outcomes in key NIPSCO electric and PA gas rate cases in 2025. Finally, following the NIPSCO stake sale, NI's balance

sheet is in a position of strength for the first time ever with FFO/Debt projected at 14-16%. NI trades at a premium

vs. gas and electric peers. We think over time that premium should increase given NI's strong EPS growth bolstered

by data center-related earnings at GenCo, strengthened balance sheet that provides financing flexibility, consistent

regulatory execution in constructive jurisdictions, enhanced visibility into capital recovery through trackers/riders and

forward test years, and $2.0B of capex upside opportunities over 2026-30 plus incremental/additive investment

themes including 3 GW of strategic negotiations and up to 2 GW of developing opportunities in GenCo's data center

pipeline by 2035.

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