• If you are wondering whether Spire at around US$90 per share looks expensive, cheap, or somewhere in between, this article walks through the key numbers so you can judge the value for yourself.
• Over the past week the stock returned around a 0.5% decline, while the 1 year return sits at 23.1% and the 3 year return at 48.5%, which may have changed how investors view both its potential and its risks.
• Recent attention around Spire has centered on its position in the gas utilities space and how investors are weighing regulated returns against interest rate and policy uncertainty. This mix of sector specific talking points and broader market debate helps explain why the stock’s 8.7% year to date return sits alongside a relatively flat 30 day move of about a 0.6% decline.
• Even so, Spire currently scores 0 out of 6 on our valuation checks. Next up, this article will walk through traditional valuation approaches, and then finish with a more comprehensive way to think about what the stock might be worth in context.

Spire scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Spire Dividend Discount Model (DDM) Analysis

The Dividend Discount Model estimates what a stock might be worth by projecting future dividends, applying an assumed growth rate, and discounting those cash flows back to today. It is most useful for companies where dividends are a central part of the return.

For Spire, the model uses a current annual dividend per share of US$3.57 and a calculated return on equity of 8.16%. With a payout ratio of 72.45%, the implied reinvestment rate and return on that reinvestment translate into an expected dividend growth rate of about 2.25%. This is based on the formula shown: calculated as (1 minus payout ratio) multiplied by ROE, or (1 minus 72.45%) multiplied by 8.16%.

Running these assumptions through the DDM framework produces an estimated intrinsic value of about US$75.45 per share. Compared with a current share price around US$90, this indicates Spire screens as roughly 19.8% overvalued on this dividend-based measure.

Result: OVERVALUED

Our Dividend Discount Model (DDM) analysis suggests Spire may be overvalued by 19.8%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Spire Price vs Earnings

P/E is a common way to look at valuation for profitable companies because it ties the share price directly to the earnings that support it. A higher or lower P/E usually reflects what the market is willing to pay for each dollar of earnings, given expectations for future growth and the level of risk investors see in the business.

Spire currently trades on a P/E of 19.77x. That is close to the Gas Utilities industry average of 14.32x and also sits near the peer group average of 19.51x, so on simple comparisons the stock is priced in line with similar names rather than standing out as very expensive or very cheap.

Simply Wall St’s Fair Ratio for Spire is 19.03x. This is a proprietary estimate of what a “normal” P/E might look like for the company after considering factors such as earnings growth, profit margins, industry, market cap and key risks. Because it blends these company specific drivers with sector context, it can be more informative than relying only on broad industry or peer averages. Comparing the Fair Ratio of 19.03x with the current P/E of 19.77x suggests Spire screens as slightly overvalued on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Spire Narrative

Earlier it was mentioned that there is an even better way to think about valuation, and on Simply Wall St that takes the form of Narratives. In a Narrative, you set out your view of Spire’s story, link it to specific assumptions for future revenue, earnings and margins, translate that into a fair value, then compare that fair value with today’s price to assess whether the stock looks attractive or not. All of this happens within a Community page tool that updates when new information such as earnings or news arrives. One investor might build a bullish Spire Narrative that aligns with a fair value close to the US$106 analyst target, while another might take a more cautious view and anchor nearer US$87. Both investors can clearly see how their different forecasts and assessments of risk lead to those two very different numbers.

Do you think there's more to the story for Spire? Head over to our Community to see what others are saying!

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.