Michael Gaugler, an analyst from Janney Montgomery, has initiated a new Hold rating on Spire (SR).
Michael Gaugler has given his Hold rating due to a combination of factors including Spire's operating environment, financial strategy, and future prospects. Although Spire benefits from constructive regulatory conditions in states such as Missouri, Alabama, and Mississippi, it faces challenges from unfavorable weather and rising operational costs. These factors have led to lower-than-expected earnings, despite regulatory mechanisms aimed at stability.
Additionally, Spire's financial outlook includes significant capital expenditures and dividend commitments, which could pressure its cash flow and financial ratios. The ongoing development of midstream activities is a positive aspect, providing a potential source of future earnings growth. However, given the current valuation and attractive dividend yield of approximately 4.5%, the shares appear reasonably priced, supporting the Hold rating.
In another report released on December 13, Bank of America Securities also initiated coverage with a Hold rating on the stock with a $70.00 price target.
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Spire Inc. operates as a public utility holding company, which provides natural gas service through its utility operations while engaging in non-regulated activities. It operates through the following business segments: Gas Utility and Gas Marketing. The Gas Utility segment includes the regulated operations of Laclede Gas Company and Alabama Gas Corporation. The Gas Marketing segment includes Laclede Energy Resources, Inc. a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. The company also engages in other businesses, including the transportation of liquid propane, real estate development, the compression of natural gas, financial investments in other enterprises, propane sales transactions, propane storage, and related services, and merchandise sales business. Spire was founded on October 1, 2001 and is headquartered in St. Louis, MO.