Download PDF

1. Company Snapshot

1.a. Company Description

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers.The company operates through Electric and Natural Gas segments.It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities.


The company operates 6,819 miles of electric transmission and 18,177 miles of electric distribution lines with approximately 400 transmission and distribution substations; and 2,166 miles of natural gas transmission and 4,945 miles of natural gas distribution lines with approximately 138 city gate stations in Montana.It also operates 1,308 miles of electric transmission and 2,320 miles of electric distribution lines in South Dakota; and 55 miles of natural gas transmission and 2,517 miles of natural gas distribution lines in South Dakota and Nebraska.The company serves approximately 753,600 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park.


NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.

Show Full description

1.b. Last Insights on NWE

NorthWestern Corporation's recent performance has been influenced by several factors. The company's Q2 earnings beat estimates, with quarterly earnings of $0.4 per share, surpassing the Zacks Consensus Estimate of $0.38 per share. However, net income decreased to $21.2 million, or $0.35 per diluted share, primarily due to lower retail natural gas and electric usage driven by weather conditions. Additionally, the company has signed a letter of intent to provide energy services for Quantica Infrastructure's proposed data center development in Montana. A Zacks upgrade to a Buy rating cites growing optimism about earnings prospects.

1.c. Company Highlights

2. NorthWestern Energy's Q3 2025 Earnings: Solid Performance and Merger Update

NorthWestern Energy reported a solid third quarter, with GAAP diluted EPS of $0.62 per share and non-GAAP diluted EPS of $0.79 per share, beating analyst estimates of $0.75. Revenue growth was driven by the integration of Energy West acquisition, which added natural gas assets and customers. The company's margin improvement was a key driver of the quarter's results, as noted by Crystal Lail, "the main drivers of the quarter's results included margin improvement, higher operating costs, and merger-related costs." The non-GAAP earnings were $0.79 compared to $0.65 in the prior period, indicating a significant increase.

Publication Date: Nov -02

📋 Highlights
  • EPS Performance:: GAAP diluted EPS of $0.62 and non-GAAP diluted EPS of $0.79 for Q3 2025, reaffirming 2025 guidance of $3.53–$3.65.
  • Merger Timeline:: Merger with Black Hills Corporation expected to close by mid-2026, with S-4 filing in Q1 2026 and shareholder meetings in Q2/Q3 2026.
  • Large Load Agreements:: Three LOIs secured with SEBI, Atlas, and Quantica, with a planned large load tariff filing in Q4 2025 and a development agreement with SEBI.
  • Colstrip Transaction:: Closing of Avista Colstrip interest transfer on January 1, 2026, with a temporary tariff waiver to recover $XXM in incremental operating costs.
  • Gas Plant Approval:: South Dakota gas plant submission meets 2030 requirements, with transmission approval expected in early 2026 and capital plan updates in Q4 2025.

Merger Update and Regulatory Developments

The company made significant progress on its merger with Black Hills Corporation, filing with the necessary regulatory commissions and expecting to release the S-4 and joint proxy statement in Q1 2026. The merger is expected to create a larger, more financially strong company that can better serve shareholders, customers, and employees, as stated by Brian Bird. The transaction is anticipated to close in the second half of 2026. Additionally, NorthWestern Energy filed a tariff waiver request with the MPSC for recovery of operating costs associated with the Avista Colstrip interest.

Large Load Customers and Data Center Activity

NorthWestern Energy has made progress in its large load customer segment, with three Letters of Intent (LOIs) signed with SEBI, Atlas, and Quantica. The company anticipates filing a large load tariff with the MPSC in Q4 2025. In the data center front, the queue count increased by 1 in the request stage and by 3 in the high-level assessment stage, indicating potential for future growth. Brian Bird mentioned that at least one project could move forward relatively soon.

Valuation and Growth Prospects

Analysts estimate NorthWestern Energy's revenue growth at 4.8% for next year. With a P/E Ratio of 16.89 and an EV/EBITDA of 11.08, the stock appears reasonably valued. The Dividend Yield of 4.41% is attractive, providing a relatively stable return. The company's ROE of 7.54% and ROIC of 4.49% indicate a decent return on equity and invested capital. As the merger with Black Hills Corporation progresses, investors will be watching for further updates on the integration and potential synergies.

3. NewsRoom

Card image cap

This Utility Stock Is Up 22% in One Year: What a Fund's $7.6 Million Position Says About NWE's Outlook

00:25

Source: fool.com

Card image cap

Teacher Retirement System of Texas Boosts Stock Holdings in NorthWestern Energy Group, Inc. $NWE

Nov -05

Source: defenseworld.net

Card image cap

NorthWestern Energy Group, Inc. (NWE) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

Card image cap

NorthWestern (NWE) Q3 Earnings and Revenues Surpass Estimates

Oct -30

Source: zacks.com

Card image cap

NorthWestern Energy Reports Third Quarter 2025 Financial Results

Oct -29

Source: businesswire.com

Card image cap

Sequoia Financial Advisors LLC Makes New $347,000 Investment in NorthWestern Energy Group, Inc. $NWE

Oct -22

Source: defenseworld.net

Card image cap

NorthWestern to Host Third Quarter 2025 Financial Results Webinar

Oct -07

Source: businesswire.com

Card image cap

4 Utility Stocks to Buy as Consumer Confidence Continues to Shrink

Oct -01

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.25%)

6. Segments

Electric

Expected Growth: 4.5%

NorthWestern Corporation's 4.5% growth in Electric segment is driven by increasing demand for renewable energy, favorable weather conditions, and strategic investments in grid modernization. Additionally, the company's focus on energy efficiency programs and customer growth in the Montana and South Dakota regions contribute to the segment's growth.

Gas

Expected Growth: 3.5%

NorthWestern Corporation's 3.5% growth in Gas segment is driven by increasing demand for clean energy, favorable regulatory environment, and strategic investments in infrastructure expansion and modernization. Additionally, the company's focus on customer acquisition and retention, as well as its ability to pass through increased costs to customers, contribute to the segment's growth.

7. Detailed Products

Electricity

NorthWestern Corporation provides electricity to residential, commercial, and industrial customers through its regulated electric utility operations.

Natural Gas

The company distributes natural gas to customers through its regulated gas utility operations, providing a clean and efficient source of energy.

Transmission Services

NorthWestern Corporation offers transmission services, enabling the efficient and reliable transmission of electricity across its network.

Distribution Services

The company provides distribution services, delivering electricity and natural gas to customers through its network of power lines and pipelines.

Renewable Energy Solutions

NorthWestern Corporation offers renewable energy solutions, including wind and solar power, to customers seeking sustainable energy options.

8. NorthWestern Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

NorthWestern Corporation operates in the energy industry, which has few substitutes. However, the increasing adoption of renewable energy sources and energy-efficient technologies poses a moderate threat of substitutes.

Bargaining Power Of Customers

NorthWestern Corporation's customers have limited bargaining power due to the lack of alternative energy providers in the region. However, the company's dependence on a few large industrial customers increases their bargaining power.

Bargaining Power Of Suppliers

NorthWestern Corporation relies on a few large suppliers for fuel and equipment. While the company has some bargaining power due to its size, the suppliers' ability to negotiate prices and terms is moderate.

Threat Of New Entrants

The energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows NorthWestern Corporation to maintain its market position.

Intensity Of Rivalry

The energy industry is highly competitive, with several established players competing for market share. NorthWestern Corporation faces intense rivalry from other energy providers, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.07%
Debt Cost 4.26%
Equity Weight 49.93%
Equity Cost 6.15%
WACC 5.20%
Leverage 100.29%

11. Quality Control: NorthWestern Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Otter Tail

A-Score: 6.6/10

Value: 5.3

Growth: 7.0

Quality: 6.5

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
NorthWestern

A-Score: 6.5/10

Value: 6.1

Growth: 3.4

Quality: 5.1

Yield: 8.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
ALLETE

A-Score: 6.4/10

Value: 5.9

Growth: 4.0

Quality: 4.3

Yield: 8.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Avista

A-Score: 6.3/10

Value: 6.5

Growth: 4.2

Quality: 4.3

Yield: 8.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Black Hills

A-Score: 6.2/10

Value: 5.2

Growth: 4.4

Quality: 4.4

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
AES

A-Score: 5.1/10

Value: 6.6

Growth: 5.4

Quality: 3.5

Yield: 8.0

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

65.67$

Current Price

65.67$

Potential

-0.00%

Expected Cash-Flows