Education
About Us
Working with TipRanks
Follow Us
Northwestern Corp. (NWE)
NASDAQ:NWE
Top Page
Northwestern
(NASDAQ:NWE)
68Neutral
Positive Factors
Data Center Development
The recent announcement of a 50MW data center opportunity beginning in 2027, which could grow to 250MW or more by 2029, provides ~$0.15 of EPS to start, with additional positive knock on effects.
Earnings Growth
Year over year earnings growth was primarily attributable to rate relief in Montana and South Dakota, higher electric transmission revenues, and income tax benefits.
Market Valuation
NWE is considered one of the 'cheapest' SMID-cap names in its peer group, trading at a discount and potentially undervalued relative to de-risking initiatives.
Negative Factors
EPS Guidance
NWE lowered its FY24 adjusted EPS guidance due to delay in interim rates in MT.
Operating Costs
Gains were partially offset by higher operating costs, increased depreciation, milder weather, and increased interest expense.
Regulatory Challenges
The interim order fell short of expectations, resulting in a net $62.2M electric rate decrease instead of the sought $13.8M increase.
Northwestern (NWE) vs. S&P 500 (SPY)
Market Cap
$3.41B
Dividend Yield4.68%
Average Volume (3M)587.18K
Price to Earnings (P/E)15.2
Beta (1Y)0.48
Revenue Growth6.45%
EPS Growth13.95%
CountryUS
Employees1,585
SectorUtilities
Sector Strength77
IndustryDiversified Utilities
Share Statistics
EPS (TTM)3.65
Shares Outstanding61,332,188
10 Day Avg. Volume717,101
30 Day Avg. Volume587,178
Financial Highlights & Ratios
PEG Ratio1.09
Price to Book (P/B)N/A
Price to Sales (P/S)2.24
Price to Cash Flow (P/CF)13.50
P/FCF Ratio13.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$59.08Price Target Upside4.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Northwestern Business Overview & Revenue Model
Company DescriptionNorthWestern Corporation (NWE), commonly known as NorthWestern Energy, is a publicly traded utility company that provides electricity and natural gas services to residential, commercial, and industrial customers. Operating primarily in the Upper Midwest and Northwest regions of the United States, NorthWestern Energy serves customers in Montana, South Dakota, and Nebraska. The company's operations are focused on the generation, transmission, and distribution of electricity and natural gas, ensuring reliable energy delivery to its service areas.
How the Company Makes MoneyNorthWestern Energy generates revenue primarily through the sale of electricity and natural gas to its customers. The company's revenue model is based on regulated utility operations, where rates are approved by state public utility commissions. These rates are designed to cover the costs of service and provide a reasonable return on investment. Key revenue streams include residential, commercial, and industrial energy sales, with additional income from transmission services and regulated energy supply activities. NorthWestern Energy's earnings are also influenced by factors such as weather conditions, energy demand, and regulatory decisions. The company may engage in partnerships and investments to enhance its infrastructure and service capabilities, contributing further to its revenue generation.
Northwestern Financial Statement Overview
Summary
Northwestern has shown strong revenue growth and profitability improvements, with a notable increase in net profit margin. However, declining EBITDA margins and increased debt levels are areas of concern. The cash flow situation needs attention as operating cash flow has reduced, and free cash flow has worsened.Income Statement
Northwestern has shown consistent revenue growth with a notable increase from $1,422M in 2023 to $1,514M in 2024. The gross profit margin remains strong at 84.9% in 2024, higher than the previous year. Net profit margin improved from 13.6% in 2023 to 14.8% in 2024. However, EBITDA margin decreased from 37% in 2023 to 21.4% in 2024, indicating potential cost management issues.72
Positive
Balance Sheet
The company's debt-to-equity ratio increased slightly, indicating a higher financial leverage, with debt rising to $2,999M. ROE improved to 7.8% in 2024 compared to 7% in 2023, showcasing better returns on equity. Equity ratio remained stable at 35.7%, reflecting a balanced capital structure. However, increasing debt levels could pose risks if not managed effectively.68
Positive
Cash Flow
Operating cash flow decreased from $489M in 2023 to $407M in 2024, and free cash flow turned more negative, from -$78M in 2023 to -$143M in 2024. The operating cash flow to net income ratio declined, indicating potential cash management issues. The company needs to improve its cash flow generation to support its financial obligations and investment activities.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.51B | 1.42B | 1.48B | 1.37B | 1.20B | Gross Profit |
| 1.29B | 781.36M | 985.80M | 946.77M | 892.48M | EBIT |
| 323.32M | 300.45M | 263.10M | 275.68M | 236.20M | EBITDA |
| 573.98M | 526.15M | 466.58M | 456.95M | 416.19M | Net Income Common Stockholders |
| 224.11M | 194.13M | 183.01M | 186.84M | 155.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.28M | 9.16M | 8.49M | 2.82M | 5.81M | Total Assets |
| 8.00B | 7.60B | 7.32B | 6.78B | 6.39B | Total Debt |
| 3.10B | 2.79B | 2.63B | 2.56B | 2.43B | Net Debt |
| 3.10B | 2.78B | 2.62B | 2.55B | 2.43B | Total Liabilities |
| 5.14B | 4.82B | 4.65B | 4.44B | 4.31B | Stockholders Equity |
| 2.86B | 2.79B | 2.67B | 2.34B | 2.08B |
| Cash Flow | Free Cash Flow | |||
| -142.50M | -77.66M | -207.90M | -214.35M | -53.61M | Operating Cash Flow |
| 406.74M | 489.23M | 307.24M | 219.98M | 352.15M | Investing Cash Flow |
| -554.46M | -570.81M | -516.86M | -435.83M | -405.80M | Financing Cash Flow |
| 151.55M | 84.31M | 213.32M | 217.52M | 58.68M |
Northwestern Technical Analysis
Positive
56.80
Price Trends
54.10
Positive
53.30
Positive
52.47
Positive
Market Momentum
0.47
Positive
54.79
Neutral
47.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWE, the sentiment is Positive. The current price of 56.8 is above the 20-day moving average (MA) of 55.38, above the 50-day MA of 54.10, and above the 200-day MA of 52.47, indicating a bullish trend. The MACD of 0.47 indicates Positive momentum. The RSI at 54.79 is Neutral, neither overbought nor oversold. The STOCH value of 47.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NWE.
Northwestern Risk Analysis
Northwestern disclosed 24 risk factors in its most recent earnings report. Northwestern reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Northwestern Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.18B | 20.66 | 9.27% | 2.98% | 3.48% | 6.67% | |
74 Outperform | $4.79B | 14.30 | 8.80% | 4.59% | 15.67% | 29.07% | |
73 Outperform | $3.81B | 21.16 | 6.34% | 4.33% | -18.62% | -27.88% | |
73 Outperform | $9.07B | 20.44 | 9.65% | 3.75% | 11.63% | 5.61% | |
70 Neutral | $11.09B | 17.75 | 9.42% | 3.82% | 9.13% | 21.11% | |
68 Neutral | $3.41B | 15.20 | 7.94% | 4.68% | 6.45% | 13.95% | |
65 Neutral | $12.09B | 16.10 | 6.13% | 4.39% | 5.50% | -7.46% |
* Utilities Sector Average
Performance Comparison
NWE
Northwestern
56.80
8.59
17.82%
ALE
Allete
65.71
8.67
15.20%
IDA
IdaCorp
114.94
25.81
28.96%
OGE
OGE Energy
45.49
12.64
38.48%
PNW
Pinnacle West Capital
94.17
23.24
32.76%
POR
Portland GE
44.41
4.31
10.75%
Northwestern Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 6.21% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment. While there are significant achievements in capital investments, dividend growth, and expansion plans, these are offset by challenges such as mild weather impacts, operating cost pressures, regulatory lag, and credit quality concerns.Highlights
Record Capital Investment
NorthWestern Corporation completed over $550 million in capital investments, including the Yellowstone County generating station coming online, and announced a $2.74 billion five-year capital plan, which is an 11% increase over the previous plan.
EPS and Dividend Growth
The company reported a diluted GAAP EPS of $3.65, affirming long-term EPS and rate base growth targets of 4% to 6%. Additionally, the quarterly dividend was increased by 1.5% to $0.66 per share.
Strong Regulatory Execution
NorthWestern achieved a full year of new base rates in both Montana and South Dakota, leading to a $62.4 million margin improvement.
Data Center Expansion
Announced plans to support new large load customers, with data centers expected to increase power demand significantly in Montana.
Focus on Transmission Expansion
Plans for regional transmission expansion, including the North Plains Connector, are in progress, which will bolster reliability and enable incremental imports and exports.
Lowlights
Impact of Mild Weather
Mild weather conditions negatively impacted Q4 results by $0.10 per share compared to normal expectations.
Pressure from Operating Costs
The company faced pressures from higher operating costs, depreciation, and interest, impacting financial results.
Regulatory Lag in Montana
The lack of constructive interim rate support in Montana affected earnings, with the regulatory process lagging behind necessary rate adjustments.
Credit Quality Concerns
The company concluded 2024 below the downside threshold for credit quality, due to lack of interim rate support in Montana.
Company Guidance
During NorthWestern Corporation's 2024 Year End Financial Results Webinar, key guidance highlights included a strong year of execution with a $550 million capital investment and the completion of the Yellowstone County generating station. The company reported diluted GAAP EPS of $3.65 and affirmed its long-term EPS and rate base target growth rates of 4% to 6%. NorthWestern Corporation announced a $2.74 billion five-year capital plan, representing an 11% increase over prior plans, and increased their quarterly dividend by 1.5% to $0.66 per share. Despite challenges from mild weather impacting earnings and regulatory lag in Montana, the company is focused on maintaining credit quality and capitalizing on growth opportunities such as data centers and regional transmission expansion. They are optimistic about achieving sustainable earnings growth and meeting their financial targets while working on mitigating the impacts of regulatory decisions and pursuing incremental investment potential.Northwestern Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
NorthWestern Reports 2024 Financial Results and Future Plans
Positive
Feb 13, 2025
On February 12, 2025, NorthWestern Energy reported its 2024 financial results, showing an increase in diluted GAAP EPS to $3.65 from $3.22 in 2023. The company announced a $2.7 billion five-year capital plan and a 1.5% increase in quarterly dividends. The results were influenced by rate reviews in Montana and South Dakota, higher transmission revenues, and tax benefits, while facing challenges like non-recoverable supply costs and mild weather. The company completed the Yellowstone County Generating Station and plans investments in regional transmission projects to enhance reliability and economic development in Montana. Despite 2024 challenges, NorthWestern remains confident in its growth trajectory for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.