Spire sinks after JPM downgrades on disappointing earnings growth outlook
Spire (NYSE:SR) -6.3% in Monday's trading after J.P. Morgan downgraded the utility to Neutral from Overweight with a $69 price target, trimmed from $75, as its long-term growth outlook "came in light" following Missouri's rate case settlement, with both 2023 guidance and implied forward earnings power landing well short of expectations.
While the company reiterated guidance for 5%-7% annual forward EPS growth, JPM's Richard Sunderland said the selection of a new $3.74 2002 run-rate growth base as a de facto cut, particularly given Spire's (SR) latest rate order "drives a 2023 and beyond uplift not captured in this earnings base."
The data points also imply a disappointing 3.6% 2023-25 earnings compound annual growth rate by taking into account Spire's (SR) 2023 earnings step-up from new Missouri rates and 2025 earnings power under the CAGR refresh, according to Sunderland.
Spire (SR) recently reported a Q4 adjusted loss of $0.66/share on revenues of $314M.