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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.

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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 Earnings Report: A Closer Look

Northwestern Energy Group Inc reported GAAP diluted EPS of $2.94 and non-GAAP diluted EPS of $3.58 for the full year 2025. The company's financial performance was strong, with a 1.5% increase in the quarterly dividend to $0.67 per share. The actual EPS came out at $1.17 for the quarter, slightly below estimates of $1.19. The company initiated 2026 earnings guidance of $3.68 to $3.83 per share, representing 5% growth at the midpoint off of 2025 results.

Publication Date: Feb -14

📋 Highlights
  • Merger with Black Hills Corp:: Proposed merger aims to enhance shareholder value via scale, risk reduction, and business diversification, with expected approvals in 2026.
  • 2025 Financial Performance:: GAAP diluted EPS of $2.94, non-GAAP $3.58, and 1.5% dividend hike to $0.67/share, with 2026 guidance at $3.68–$3.83/share (5% growth at midpoint).
  • Capital Plan Expansion:: Updated $3.21 billion capital plan (17% increase) to fund growth projects, including a $300 million South Dakota natural gas plant targeting 2030 in-service.
  • Data Center Growth:: Advanced two development agreements (Atlas Power, Sebi) and aims to establish a large load tariff to protect customers while serving high-demand sectors.
  • Colstrip Ownership & Expansion:: Increased ownership to 55% (Puget units) and 30% (Colstrip), adding 222 MW capacity, though control remains limited at 30% stake.

Financial Highlights

The company's updated capital plan is $3,210,000,000, a 17% increase over the prior plan. The increased investment is expected to drive growth and provide a total return of 8% to 10%. The dividend yield is approximately 4%, and the P/E Ratio is 19.72, indicating that the stock may be slightly overvalued. The EV/EBITDA ratio is 12.09, which is reasonable for a utility company.

Merger and Acquisition Update

The company is progressing with its proposed merger with Black Hills Corporation, having filed joint applications for approval in three states. The shareholder votes are scheduled for April 2, and the company expects approvals and closing in 2026. The merger is expected to bring benefits to shareholders, including increased scale and growth, reduced risk, and strengthened balance sheet and credit metrics.

Data Center Growth Opportunities

The company is making progress in its data center growth opportunities, having signed a development agreement with Atlas Power and advanced a development agreement with Sebi. The company hopes to serve large load customers on a state jurisdictional basis and is working to establish a large load tariff that protects customers. The company's ESA strategy involves filing a tariff for all data centers in the first half of 2026.

Outlook and Valuation

The company's growth outlook is positive, with a 4% to 10% EPS CAGR driven by incremental generation in South Dakota and other opportunities. Analysts estimate next year's revenue growth at 3.6%. The company's valuation metrics, such as the P/E Ratio and EV/EBITDA, indicate that the stock may be reasonably valued. However, the Free Cash Flow Yield is negative, which may be a concern for investors.

3. NewsRoom

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NorthWestern Energy: This Ignored Utility Could Profit From The Data Center Boom

Feb -15

Source: seekingalpha.com

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NorthWestern Energy Group, Inc. (NWE) Q4 2025 Earnings Call Transcript

Feb -13

Source: seekingalpha.com

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NorthWestern Energy Reports 2025 Financial Results

Feb -12

Source: businesswire.com

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Halper Sadeh LLC is Investigating Whether NWE, LSF, BHRB, LNKB are Obtaining Fair Deals for their Shareholders

Feb -09

Source: globenewswire.com

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Why NorthWestern (NWE) Could Beat Earnings Estimates Again

Jan -29

Source: zacks.com

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NorthWestern (NASDAQ:NWE) Sees Large Volume Increase – Time to Buy?

Jan -25

Source: defenseworld.net

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Sequoia Financial Advisors LLC Buys 10,794 Shares of NorthWestern Energy Group, Inc. $NWE

Jan -24

Source: defenseworld.net

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Comparing Commerce Energy Group (OTCMKTS:CMNR) and NorthWestern (NASDAQ:NWE)

Jan -12

Source: defenseworld.net

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
Avista

A-Score: 6.9/10

Value: 7.1

Growth: 4.2

Quality: 4.6

Yield: 8.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
NorthWestern

A-Score: 6.8/10

Value: 6.3

Growth: 3.3

Quality: 5.3

Yield: 8.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Otter Tail

A-Score: 6.7/10

Value: 5.1

Growth: 7.0

Quality: 6.5

Yield: 6.0

Momentum: 7.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Black Hills

A-Score: 6.7/10

Value: 5.3

Growth: 4.2

Quality: 4.4

Yield: 8.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
ALLETE

A-Score: 6.5/10

Value: 5.7

Growth: 3.9

Quality: 4.4

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
AES

A-Score: 6.0/10

Value: 7.2

Growth: 5.4

Quality: 3.8

Yield: 8.0

Momentum: 7.0

Volatility: 4.3

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

69.3$

Current Price

69.3$

Potential

-0.00%

Expected Cash-Flows