Spire (SR) has drawn fresh attention after terminating the certificate of designations for its 5.90% Series A Cumulative Redeemable Perpetual Preferred Stock, along with recent earnings and dividend updates in the natural gas utilities sector.

That change to Spire’s capital structure comes as the share price trades at US$91.66, with a 30 day share price return of 8.49% and a 1 year total shareholder return of 22.45%. The 5 year total shareholder return of 55.79% suggests longer term momentum has been stronger than the recent move.

If the preferred stock change has you thinking about how other utilities and infrastructure names are positioned, it could be a good moment to scan our list of 23 power grid technology and infrastructure stocks as a starting point for fresh ideas.

With Spire’s shares sitting at US$91.66 after a strong 1 year and 5 year run, along with recent tweaks to its capital structure, you have to ask yourself: is there still value on the table, or is the market already pricing in future growth?

Most Popular Narrative: 4.6% Undervalued

Spire’s last close at $91.66 sits below the most followed fair value estimate of $96.13, which is built on detailed growth and margin assumptions.

Significant and ongoing investments in infrastructure modernization and system resilience, supported by constructive regulatory frameworks and reliable cost recovery mechanisms, are growing Spire's regulated asset base, which should result in higher allowed returns and gradual increases in net income. Recent large rate case settlements and refinement of weather normalization and cost-recovery mechanisms in Missouri are set to increase annualized revenues by $210 million and reduce earnings volatility, directly supporting margin expansion and providing a more stable foundation for future earnings.

Curious what kind of revenue path and profit margins are baked into that valuation, and how long the market is assumed to support those earnings multiples? The full narrative spells out the growth runway, the earnings step up and the valuation bridge that connects today’s price to that $96.13 figure.

Result: Fair Value of $96.13 (UNDERVALUED)

However, you still have to weigh the risk that decarbonization policies curb natural gas demand and that heavier infrastructure spending without full regulatory recovery squeezes margins and cash flow.

Another Way To Look At Value

That 4.6% gap to the $96.13 fair value is built on detailed earnings forecasts, but the simple P/E check paints a tougher picture. At around 20x earnings, Spire trades above its own fair ratio of 18.6x, above the US gas utilities peer average of 19.4x, and well above the global gas utilities average of 14.2x. For you, that means less of a clear cushion if sentiment cools.

Next Steps

With mixed signals on value and some moving pieces in the story, it makes sense to act now and test the data for yourself. The balance of potential upside and downside is clearer when you look at the full breakdown of 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

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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.