In a report published Tuesday, Morgan Stanley analyst Brian Lasky reiterated an Equal-Weight rating on NiSource Inc. (NYSE: NI), and raised the price target from $43.00 to $45.00.
In the report, Morgan Stanley noted, “NiSource analyst day highlights separation potential given leading position within the Marcellus and Utica shales. Despite limited details on COLP or CPPL’s strategy, investors were encouraged by the value unlock proposition of spinning off COLP and establishing CPPL as a dropdown vehicle with significant exposure to infrastructure investment within the Marcellus and Utica. However, there is a debate around what is currently priced in the stock. Management outlined an investment opportunity of $12-15b of projects over the next 10 years for CPPL and expects to place into service almost $4b of projects by YE18. Additionally, NiSource sees a bright outlook at LCD and NIPSCO, where ~$1.2b of expected annual capital investment will produce 4-6% of expected EPS and dividend growth. NI noted that once the MLP IPO and COLP spin-off is complete, they will provide more detailed guidance on the proforma entities.”
NiSource Inc. closed on Monday at $40.84.
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