Balanced Outlook for Northwest Gas: Hold Rating Amid Growth Potential and Financial Risks

Maxim Group analyst Tate Sullivan has maintained their neutral stance on NWN stock, giving a Hold rating on May 6.

Tate Sullivan has given his Hold rating due to a combination of factors influencing Northwest Gas’s current and future performance. The company’s recent financial results exceeded expectations, with notable revenue and earnings growth driven by acquisitions and favorable weather conditions. However, despite these positive outcomes, the stock’s current valuation at 14.8 times the 2025 EPS estimate aligns closely with its long-term EPS growth target of 4%-6%, suggesting a balanced risk/reward scenario.
Additionally, Northwest Gas’s strategic moves, such as the acquisition of SiEnergy and plans for further acquisitions, indicate potential for future growth. However, the company’s increased debt levels and plans to raise capital through an equity program to support capital expenditures could pose financial risks. These elements contribute to maintaining a Hold rating, as the potential for growth is tempered by the need to manage financial leverage and the stock’s current valuation metrics.

According to TipRanks, Sullivan is an analyst with an average return of -12.7% and a 36.35% success rate. Sullivan covers the Industrials sector, focusing on stocks such as Euroseas, NV5 Holdings, and BWX Technologies.

In another report released on May 6, Wells Fargo also reiterated a Hold rating on the stock with a $47.00 price target.