Wunderlich: NISOURCE Posts Solid Quarter; Raises Estimates, PT

NiSource, Inc. NI reported 4Q operating (non-GAAP) earnings yesterday of $0.33 versus $0.36 a year ago. The 4Q and full year earnings were as expected, driven by rate cases and improving sales, but offset partially by higher expenses. The combination of pending rate cases and capital spending in 2011 of $1.1 billion should drive earnings growth of about 7% over the next three years. However, the Indiana electric rate case is a critical portion of that growth. Oppenheimer is increasing its earnings estimates for NI and increasing the 12-month target price to $18 per share from $17. Oppenheimer's 2011 EPS estimate is going up by $0.02 to $1.32, and our 2012 EPS estimate is going up by a similar amount to $1.42. Both changes reflect fine-tuning of its model and the inclusion of 2010 actual earnings. Oppenheimer is initiating a 2013 EPS estimate of $1.49. Its earnings estimates assume the equity forward is fully settled with stock by September 2012, and the company achieves reasonable regulatory outcomes in the various rate cases. NI closed Tuesday at $18.73