Dakota Data Center Story Accelerates with New ESA, Bakken East Opportunities

Research evidence excerpt

Dakota Data Center Story Accelerates with New ESA, Bakken East Opportunities

tive margin than

the existing Ellendale contracts;we give partial credit in higher earned ROEs in ND (passing into the

sharing band) but still see upside to our estimates. Exhibit 1 - Current Price Gives Little Value to

Bakken East

Weaker 1H points to bottom half of FY26 range. MDU is in the unenviable position of needing $30

favorable weather to help restock O&M levers, but mild weather conditions persist. Without weather $25 BakkenEast,

normalization at key utilities like Idaho gas or the scale to offset in other jurisdictions, MDU stands as $6.74

$20

potentially the most weather sensitive name in our coverage. We reduce our FY26 EPS to 95¢ (below Pipeline,

the 97¢ guidance midpoint) and expect MDU could address guidance on the 2Q26 call. Multiple $15 $8.18 Current

large ESAs ramping should reduce MDU's future weather sensitivity. $10 $5.02Gas, $21.32Price,

$5 Electric,

Bakken East likely a catalyst yet again with 2Q26 reporting. Mgmt's update is likely to touch $7.60

on progress of precedent agreements (~40% as of 1Q), updated pipeline capacity and capex, $0 JEFe SOTP Current Price

next steps to prepare for FERC Form 7c filing, and potential financing options. Investors expect .Source: Jefferies Research, Factset

a significant step-up in precedent agreements - we think the bogey at this point could be 60-75%

subscribed. We find Bakken East upside to be compelling and highly visible given stakeholder

cooperation. Julien Dumoulin-Smith * | Equity Analyst

+1 (281) 774-2066 | jds@jefferies.com

Generally, MDU is a high-upside single-large-project story that benefits in both EPS growth and Paul Zimbardo * | Equity Analyst

positive mix shift over time.