NiSource Inc. (NI): SWOT Analysis [Nov-2025 Updated]

You're looking at NiSource (NI) as a sleepy utility, but honestly, it's a growth stock in disguise right now. The core business is still a cash-flow machine, but the big story is the pivot: a massive $28.0 billion capital plan, anchored by a landmark regulatory win to serve the booming data center market. This move has pushed their consolidated adjusted EPS growth target up to 8%-9% CAGR through 2033, which is aggressive for a utility. Still, that ambition comes with real risks, particularly a high debt load and the sheer complexity of managing such a huge lift. Let's cut through the noise and map out the full Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis you need to see what's really driving the stock.

NiSource Inc. (NI) - SWOT Analysis: Strengths

Regulated utility model drives predictable cash flow and earnings.

The core strength of NiSource Inc. starts with its fully regulated business model, which is defintely the bedrock for predictable financial performance. This model, covering natural gas distribution and electric operations across six states, allows the company to recover capital investments and earn a regulated rate of return (ROR) on its rate base, which is essentially the value of its assets approved by regulators. This structure insulates earnings from the wild swings of commodity markets, giving you a clear view of future cash flows.

For an investor, this means the company's growth isn't a gamble on new, unproven markets; it's a function of approved infrastructure spending. The stability here is why utilities are often seen as a defensive play. It's a reliable engine for long-term value.

Reaffirmed 2025 adjusted EPS guidance at the upper half of $1.85 to $1.89.

You want to see management confidence, and NiSource is showing it. As of the third quarter of 2025, the company reaffirmed the upper half of its non-GAAP adjusted earnings per share (EPS) guidance for the 2025 fiscal year. This puts the expected adjusted EPS at the high end of the $1.85 to $1.89 range.

This isn't just a number; it's a signal that their operational execution and regulatory strategy are working, even with market headwinds. Here's the quick math: achieving the high end of that range would represent a solid year-over-year growth from the $1.75 non-GAAP EPS they delivered in 2024.

Massive capital plan of $28.0 billion over five years ensures long-term rate base growth.

The most significant near-term strength is the sheer scale of the capital program, which is the fuel for future earnings. NiSource recently unveiled a consolidated capital expenditure plan of $28.0 billion through 2030. This is a massive increase, about 45% or $8.6 billion more than their prior five-year outlook, and it's a direct response to rising energy demand, especially from new data centers.

Specifically, approximately $7.0 billion of this new capital is dedicated to data center infrastructure, including constructing two combined-cycle gas turbine power plants and 400 megawatts of battery storage capacity. This strategic pivot to supply the booming AI and digital economy is a major growth catalyst.

Strong decarbonization commitment: retiring 100% of coal assets by 2028.

The company's commitment to the energy transition is a long-term strength that mitigates regulatory and environmental risk. NiSource has a goal to retire 100% of its coal-fired generation assets by 2028. This move is critical for meeting increasingly stringent environmental standards and positioning the company as a leader in clean energy.

However, to be fair, the recent surge in demand from data centers has led to a discussion about potentially slowing the shutdown of some coal capacity to ensure supply reliability, which is a near-term operational challenge to watch. Still, the underlying strategy is a shift toward a cleaner, more resilient energy mix, which includes significant investment in renewables.

Expecting annual rate base growth of 8%-10% through 2029.

The regulated utility business is all about rate base growth, and NiSource has one of the most aggressive targets in the sector. The company is projecting a robust annual rate base growth of 8%-10% through 2029. This growth is directly tied to the infrastructure investments in the capital plan.

This rate base expansion is what drives the expected annual non-GAAP adjusted EPS growth of 6%-8% for the base business through 2030, and a consolidated adjusted EPS compound annual growth rate (CAGR) of 8%-9% through 2033, incorporating the new data center investments. This is a strong, multi-year growth runway.

• Drive 8%-10% annual rate base growth.
• Fuel 6%-8% annual adjusted EPS growth for the base business.
• Target 8%-9% consolidated adjusted EPS CAGR through 2033.

NiSource Inc. (NI) - SWOT Analysis: Weaknesses

You're looking at NiSource Inc. (NI) and seeing a strong utility growth story, but you also need to map the financial anchors holding it back. Honestly, the biggest weakness here isn't a surprise: it's the sheer size of the debt and the capital program that requires it. This is a capital-intensive business, so the balance sheet is always going to be the first place we look for stress.

High leverage with a debt-to-equity ratio of 1.29 as of Q3 2025.

The company's reliance on debt financing, while common for utilities (a capital-intensive business), is a major concern right now. As of the end of Q3 2025, NiSource Inc.'s debt-to-equity (D/E) ratio stood at 1.29. This means for every dollar of shareholder equity, there is $1.29 in debt. That's high.

A D/E ratio over 1.0 signals that the company is funding more of its assets with debt than with equity. This leverage amplifies returns when things go well, but it also increases your risk profile-especially in a rising interest rate environment. The cost of servicing this debt eats into earnings, which is a constant drag on free cash flow (FCF). That's the quick math on why high leverage is a weakness.

Liquidity pressure indicated by a low current ratio of only 0.52.

Liquidity is a near-term stress point you can't ignore. The current ratio, which measures a company's ability to cover its short-term liabilities with its short-term assets, was only 0.52.

A ratio below 1.0 means that current assets (cash, receivables, inventory) are not enough to cover current liabilities (payables, short-term debt). For a utility, this isn't a death sentence because of stable, regulated cash flows, but it defintely signals pressure. It forces the company to rely heavily on external financing or new debt to manage day-to-day operations and fund the early stages of its capital program.

Recent slight miss on Q3 2025 adjusted EPS at $0.19 versus the $0.20 consensus.

While the overall 2025 guidance was reaffirmed, the Q3 2025 earnings report showed a slight miss on the bottom line. NiSource Inc. reported an adjusted earnings per share (EPS) of $0.19. This was just shy of the analyst consensus estimate of $0.20, and it was also a decline from the $0.20 adjusted EPS reported in Q3 2024.

This small miss, though not catastrophic, shows a deceleration in adjusted earnings growth compared to the prior year's quarter. It adds a layer of skepticism about the immediate impact of capital investments translating into consistent, immediate earnings growth, which is what the market expects from a growth-oriented utility.

Significant capital program execution risk; $28.0 billion is a huge lift.

The newly expanded, consolidated five-year capital expenditure (CapEx) plan of $28.0 billion is a massive undertaking. This includes a $21.0 billion base plan for regulated utility operations and approximately $7.0 billion dedicated to the GenCo data center investments.

The risk here is pure execution. Managing a CapEx program of this magnitude introduces several significant risks:

• Cost overruns on large-scale projects like the new gas turbine power plants.
• Supply chain delays impacting the timeline for renewable and infrastructure modernization.
• Labor shortages or construction complexity affecting the ambitious timeline.

If even a fraction of this program faces delays or cost inflation, it pressures the balance sheet and threatens the projected 8%-9% adjusted EPS compound annual growth rate (CAGR) through 2033.

Dependence on timely recovery of capital investments through regulatory mechanisms.

As a regulated utility, NiSource Inc.'s growth thesis is completely tied to its ability to recover its capital investments (CapEx) and earn a return on them (rate base) through state regulatory bodies. This dependence is a structural weakness.

The company relies on regulatory mechanisms, like trackers, to start recovering costs quickly. However, a portion of the CapEx still faces a long regulatory lag:

• ~19% of the 2025-2029 base plan CapEx requires a recovery period of 13 months or more.

Any political or regulatory pushback in the six states it operates in-Indiana, Kentucky, Maryland, Ohio, Pennsylvania, and Virginia-could delay rate case approvals, slowing down the rate base growth and forcing the company to carry non-earning assets on its books for longer. This regulatory risk is the single most important factor to monitor for the success of that $28.0 billion plan.

NiSource Inc. (NI) - SWOT Analysis: Opportunities

Landmark IURC Approval for GenCo to Serve the Data Center Boom

The Indiana Utility Regulatory Commission (IURC) approval in September 2025 for NIPSCO Generation LLC (GenCo) is a pivotal opportunity, creating a new, scalable growth platform for NiSource Inc.. This regulatory green light allows GenCo to operate as a separate, unregulated subsidiary, specifically designed to meet the massive power demands of the booming data center industry in Northern Indiana. The genius of the structure is that it shields existing Northern Indiana Public Service Company (NIPSCO) retail customers from the costs associated with building new, large-load infrastructure, ensuring that new growth pays for new growth. This model is a blueprint for how regulated utilities can capitalize on the artificial intelligence (AI) and digital expansion trend while maintaining customer affordability, which is defintely a win-win.

New GenCo Platform Includes Approximately $7.0 Billion in Data Center-Related Capital Investment

This new GenCo platform is not just a regulatory concept; it is backed by a substantial capital commitment. NiSource has dedicated approximately $7.0 billion in strategic capital investment toward data center infrastructure, which is a key component of the newly consolidated $28.0 billion capital expenditure plan through 2030. This massive spend is a 45% increase, or about $8.6 billion more, than the prior five-year spending outlook, demonstrating a significant acceleration of growth.

The GenCo investment is specifically earmarked for critical new generation and storage capacity to serve a major, investment-grade data center customer under a 15-year fixed-rate contract. The core infrastructure includes:

• Constructing two 1,300-megawatt (MW) combined-cycle, natural gas-fired turbines.
• Adding 400 megawatts (MW) of new battery storage capacity.
• Delivering approximately $1 billion in cost savings directly to existing NIPSCO households over the life of the contract, due to the new customer bearing the infrastructure costs.

Consolidated Adjusted EPS Growth Target Raised to 8%-9% CAGR Through 2033

The GenCo strategy has immediately translated into a higher financial outlook for the entire company. Management has introduced a consolidated non-GAAP adjusted earnings per share (EPS) compound annual growth rate (CAGR) target of 8%-9% for the period from 2026 through 2033. This is a clear step up from the base business's expected growth rate of 6%-8% annually through 2030.

Here's the quick math: The company reaffirmed the upper half of its 2025 adjusted EPS guidance at $1.85 to $1.89. The GenCo investments are expected to contribute an incremental $0.25-$0.45 to adjusted EPS by 2033. This is a material boost in earnings quality, underpinned by predictable cash flows from the new, long-term data center contracts.

Continued Renewable Energy Expansion, with Capacity Already Installed or Under Development

NiSource's commitment to clean energy remains a significant opportunity, aligning with environmental, social, and governance (ESG) investment mandates and the goal of retiring all coal-fired generation by the end of 2028. The company is aggressively executing its electric generation transition, which is replacing coal with a diverse mix of wind, solar, and battery storage.

As of late 2025, NIPSCO has approximately 1,950 MW of renewable energy capacity either in-service or under construction and expected to be in-service by year-end. This is a significant, tangible asset base that drives rate base growth. The full-ownership model for many of these new projects allows NIPSCO to claim tax credits and pass the benefits to customers for a 10-year period starting in 2025.

Potential Upside Beyond the Base Capital Plan Through 2029

While the $7.0 billion GenCo investment has absorbed much of the prior 'upside' capital, there is still significant potential for growth beyond the $28.0 billion consolidated CapEx plan. The initial GenCo contract is for one large, investment-grade customer, but NiSource has a strategic pipeline for an additional 1 to 3 gigawatts (GW) of data center projects. Securing just one or two more large customers would require incremental capital investment beyond the current plan, creating a new wave of growth.

Other potential upsides that could drive capital spending beyond the current plan include:

• MISO Transmission Projects: Investments in regional transmission infrastructure to support the evolving grid.
• Transportation Electrification: Electric transmission and distribution (T&D) investments to support the growing electric vehicle (EV) market, including utility-owned charging points.
• Decarbonization and Hydrogen: Generation investments to support asset retirements, further decarbonization, and infrastructure for Renewable Natural Gas (RNG) and green hydrogen production and storage.

What this estimate hides is the timing; these projects are dependent on regulatory approvals and market evolution, but they represent a long-term, multi-billion-dollar runway for growth well into the next decade.

NiSource Inc. (NI) - SWOT Analysis: Threats

Exposure to rising interest rates due to the high debt load and need for external financing.

You're looking at a company that is fundamentally capital-intensive, and that means debt is a constant reality. NiSource Inc. (NI) has a significant need for external financing to fund its ambitious capital plan, and the current interest rate environment is a defintely a headwind. The cost of capital is rising, and that directly impacts the bottom line and the affordability of the massive infrastructure upgrades.

In 2025, we saw this threat materialize in the company's financing activities. For instance, in June 2025, NiSource issued $\mathbf{\$1.65}$ billion in SEC-registered debt. The interest rates on these new notes are substantial: $\mathbf{\$900}$ million of the offering carries a $\mathbf{5.350\%}$ coupon, and the remaining $\mathbf{\$750}$ million carries a $\mathbf{5.850\%}$ coupon. This is a clear increase in financing cost compared to the low-rate environment of the past decade. Increased long-term debt balances were cited as a factor offsetting earnings in the third quarter of 2025. The company's ability to maintain its target Funds From Operations-to-Debt (FFO/Debt) ratio, which was $\mathbf{14.6\%}$ in 2024, will be continually tested by these higher borrowing costs and the need to issue more debt to support the $\mathbf{\$28.0}$ billion capital program.

Regulatory pushback on rate increases, like the recent NIPSCO gas rate increase of about $\mathbf{\$5}$ per month for residential customers in Q1 2025.

The regulatory environment is a double-edged sword for utilities. While it provides a stable, regulated return, it also creates a check on the company's ability to pass through costs to customers. Regulatory pushback is a threat because it limits the timely recovery of capital investments, which can compress margins and delay cash flow realization.

The recent NIPSCO natural gas rate case in Indiana is a perfect example. While the Indiana Utility Regulatory Commission (IURC) approved an overall increase, it was a significant reduction from the initial request. The approved increase for the average residential natural gas customer was approximately $\mathbf{\$5}$ per month (or $\mathbf{7.1\%}$ overall), with the second phase applied in Q1 2025. This was materially lower than NIPSCO's initial proposal of approximately $\mathbf{\$8}$ per month (or $\mathbf{10.6\%}$). Furthermore, the IURC denied the request to raise the residential customer charge from $\mathbf{\$16.25}$ to $\mathbf{\$25.50}$ a month, only approving a minimal increase to $\mathbf{\$16.50}$ per month. This denial of the full requested rate base recovery highlights the tangible risk of regulatory lag and pushback on customer affordability concerns.

Increased operational complexity and risk from managing a $\mathbf{\$28.0}$ billion capital program.

The sheer scale of the consolidated capital expenditure plan, which totals $\mathbf{\$28.0}$ billion, introduces a massive layer of operational complexity. This plan represents a $\mathbf{45\%}$ increase over the previous five-year outlook. Managing a portfolio of this size across multiple states and different utility types (gas and electric) creates inherent execution risk. The company must simultaneously manage:

• Executing thousands of infrastructure modernization projects.
• Integrating $\mathbf{\$7.0}$ billion in new data center-related investments.
• Navigating construction risks and supply chain disruptions.
• Addressing risks associated with aging infrastructure while building new assets.

A program of this size is a magnet for construction delays, cost overruns, and potential operational failures, all of which could negatively impact the projected $\mathbf{8\%}$-$\mathbf{9\%}$ consolidated adjusted EPS compound annual growth rate (CAGR) through 2033.

Potential for delays or cost overruns in the coal plant retirement and renewable replacement schedule.

The transition away from coal is a major strategic goal, but it is fraught with execution risk. NiSource has already faced significant delays in its coal plant retirement schedule. The retirement of two units at the R.M. Schahfer Generating Station, originally planned for May 2023, was pushed back until the end of $\mathbf{2025}$ due to supply chain uncertainty and solar project delays. These solar projects, intended as replacements, faced delays of approximately $\mathbf{6}$ to $\mathbf{18}$ months.

Any further delays or cost overruns in the renewable replacement projects force the older, less efficient coal units to run longer, increasing operational costs, environmental compliance risk, and reputational risk. Furthermore, in late 2025, the pace of coal plant retirements appeared to be slowed by a new focus from a federal energy administration on maintaining sufficient generating capacity online. This external policy shift creates a new layer of uncertainty for the company's decarbonization timeline and capital deployment strategy.

Competition for large industrial load, defintely including the new data center customers.

The focus on large-load customers, particularly the booming data center industry in Northern Indiana, is a huge growth opportunity, but it also creates a significant, concentrated risk. The threat is twofold: competition and concentration risk.

First, while NiSource has secured a major contract for a $\mathbf{2.4}$ GW load, other utilities in the region and neighboring states are also aggressively pursuing this high-growth data center load. Competition for these customers is intense. Second, the investment required to serve this load is massive-approximately $\mathbf{\$7.0}$ billion in capital investment. The company's strategy to mitigate the risk of this concentrated load is the creation of NIPSCO Generation LLC (GenCo), a separate entity designed to shield existing NIPSCO retail customers from the costs associated with serving new data center customers. The threat here is that if the demand from these large customers falters, or if the GenCo strategy fails to fully insulate the regulated utility, the financial burden could fall back on the core business, leading to stranded assets or regulatory pushback on rate recovery. You're building a new business line on a single, large customer segment.