Why Spire stock is back on investor radar after earnings and divestitures

Spire (SR) is in focus after completing the sales of Spire Marketing and Spire Storage, reaffirming its 2026 and 2027 EPS guidance, and reporting an improved adjusted third quarter loss.

At a share price of $81.04, Spire has seen its short term share price return soften with a 90 day decline of 6.4%, while a 1 year total shareholder return of 10.56% and 3 year total shareholder return of 57.16% point to stronger longer term momentum.

If this kind of steady utility story has your attention, it can be useful to see what else is on the move in the sector. Take a look at 37 power grid technology and infrastructure stocks

Spire now looks more like a focused gas utility after the divestitures and reaffirmed guidance. The business case appears clearer. The open question is whether the current share price fairly reflects that reset.

Most popular Spire valuation narrative points to upside from here

The most followed valuation view on Spire puts fair value at $95 per share, compared with the current price of $81.04. That gap rests on a detailed set of earnings and revenue assumptions that go well beyond the latest quarter.

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.

Read the complete narrative. Read the complete narrative.

Want to understand why this narrative sees more value in Spire? The core of the story is regulated growth, stronger margins and a richer future earnings multiple. Curious which revenue and profit assumptions have been baked into that $95 figure and how sensitive it is to small changes in those inputs.

Result: Fair Value of $95 (UNDERVALUED)

However, Spire's story could shift if electrification and decarbonization policies reduce long term gas demand, or if regulators limit cost recovery on future investments.

Another view on Spire using market multiples

The SWS fair ratio suggests Spire's P/E of 17.8x is below where the market could settle at 20.2x. Yet that same P/E is higher than both US Gas Utilities peers at 13.6x and the global industry at 13.2x. This raises the question of whether the difference reflects a quality premium or a valuation risk.

Next Steps

With mixed signals around Spire's valuation and outlook, it helps to move quickly, review the underlying data, and decide where you stand using the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Spire?

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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.