Affordability Angst, But GenCo Answers; Reit. Buy, 2Q26 Preview

Research evidence excerpt

Affordability Angst, But GenCo Answers; Reit. Buy, 2Q26 Preview

USA | Power & Utilities

NiSource EquityJulyResearch21, 2026

TARGET | ESTIMATE CHANGEAffordability Angst, But GenCo Answers; Reit.

RATING BUYBuy, 2Q26 Preview

PRICE $45.37^

See affordability pullback as overstated - remain positive on IN hyperscale load.

Lower EPS ~0.5%-1% 2028+ on conservative 25 bps NIPSCO ROE cut. Still see a PRICE TARGET | % TO PT $55.00 ($56.00) | +21%

sector-leading 11.7% ’26-’30 EPS CAGR; GenCo EPS unchanged at 37¢ / 70¢ in 52W HIGH-LOW $49.21 - $38.45

’30/’33 incl. 2 GW CCGT upside. Establish 2Q26 EPS of $0.15 vs cons $0.16; light FLOAT (%) | ADV MM (USD) 100.3% | 207.47

quarter driven by cadence not guide risk. Equity layer the larger hypothetical risk MARKET CAP $21.6B

if IURC broadens scope; MSFT / LaPorte credible NT catalyst. TICKER NI ^Prior trading day's closing price unless otherwise

noted.

We perceive affordability pullback as priced-in: Indiana is not PA or NJ. Process risk has

increased with IURC dockets now open on ROE / MYRP risk and trackers, but we do not see a

FY (Dec) CHANGE TO JEFe JEF vs CONS

near-term earnings reset or PA-style thesis challenge as IN is determined on fostering large load

2026 2027 2026 2027

migration to the state.

EPS NA NA +1% +1%

Now embedding -25bps NIPSCO ROE cut; <1% EPS impact. We conservatively assume authorized DPS NA NA -2% -2%

ROE steps to 9.50% from 9.75% in 2028. EPS impact ~1% in 2028, tapering to ~0.5% as GenCo ramps;

no 2026/2027 cut. Yes, NI screens most exposed, but GenCo can soften ROE pressure over time. We 2026 ($) Q1A Q2 Q3 Q4 FY

model 16% consolidated EPS contribution in 2033 (net accretion). DPS 0.30 0.30 0.30 0.30 1.20

PREV

See equity layer as the bigger hypothetical risk. IURC report did not explicitly call out capital