NiSource (NI) is in focus after the Indiana Utility Regulatory Commission approved key agreements tied to its partnership with Amazon to serve new data center development in northern Indiana and related generation resources.

NiSource's latest news arrives as the stock trades at US$48.15, with the share price up 4.18% over the past month and 14.21% year to date. The 1 year total shareholder return of 22.55% and very large 5 year total shareholder return of 128.59% point to momentum that has built steadily over time.

If this data center announcement has you thinking more broadly about power and infrastructure, it could be a good moment to scan other potential beneficiaries across 35 power grid technology and infrastructure stocks

With NiSource trading at US$48.15 and sitting only modestly below the average analyst price target, the key question is whether the Amazon data center deal still leaves upside on the table or if the market is already pricing in future growth.

Most Popular Narrative: 6.2% Undervalued

With NiSource trading at $48.15 against a narrative fair value of $51.36, the current price sits below what the consensus model considers reasonable, using a 7.11% discount rate.

Strong visibility into multi year, rate based capital expenditure ($19.4B base plan, plus $2B+ in upside/incremental projects) positions NiSource for 6 to 8% annual EPS growth and compound growth in regulated revenue. NiSource's proactive engagement with economic development (particularly data centers) and decarbonization investments is expanding its addressable market and enabling greater long term reinvestment, further supporting durable top line and EPS growth.

Want to see what is behind that growth path and fair value for NiSource? The narrative leans on steady top line expansion, firmer margins, and a richer future earnings multiple.

Result: Fair Value of $51.36 (UNDERVALUED)

However, the NiSource story could shift if heavy gas focused capital spending meets faster electrification, or if regulators slow or reject key rate and project approvals.

Another View: What NiSource's P/E Ratio Suggests

The fair value narrative for NiSource points to some upside, but the current P/E of 24x paints a different picture. It sits slightly above close peers at 23.9x and well above the global integrated utilities average of 19.1x. It also exceeds a fair ratio of 21.9x that the market could move toward over time.

That richer P/E means you are paying more today for each dollar of NiSource earnings, which could limit upside if sentiment cools or earnings do not track expectations. How comfortable are you with paying a premium multiple when another model suggests the valuation is already full?

Next Steps

If this combination of optimism and concern around NiSource resonates with you, consider promptly reviewing the details and forming your own stance using the 2 key rewards and 3 important warning signs

Looking for more investment ideas beyond NiSource?

Do not stop with NiSource when there are other compelling opportunities to review. Use these focused stock ideas to quickly spot what could deserve a closer look.

• Target potential mispricings by scanning companies that show quality traits yet trade at appealing valuations through the 42 high quality undervalued stocks.
• Strengthen your income stream by reviewing companies that feature robust yields and consistent payouts via the 9 dividend fortresses.
• Prioritize resilience by checking stocks that pair solid balance sheets with fundamental strength using the solid balance sheet and fundamentals stocks screener (48 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.