Spire SR benefits from its investments in strengthening and expanding its operations, enabling it to meet the rising demand from an expanding customer base. It has a tendency to use technology to advance operations to save costs and improve services.

However, this Zacks Rank #3 (Hold) company faces risks related to environmental laws.

SR’s Tailwinds
 

Spire has a capital investment plan of $7.4 billion over the next 10 years to strengthen its existing operations. SR expects this systematic investment to drive 7-8% rate base growth over the long term. The company has registered a consistent increase in the average number of gas utility customers over the past few years. Spire collaborated with ONE Future to make its operations sustainable.

In January 2024, Spire closed an agreement worth $175 million with CorEnergy Infrastructure Trust to acquire MoGas Pipeline, an interstate natural gas pipeline, and Omega Pipeline, a connected gas distribution system. The deal fits in Spire’s existing midstream businesses as it bolsters resiliency and helps expand its footprint in Missouri.

Headwinds for SR Stock
 

Natural gas supply to Spire Marketing's customers is contingent on the performance of its suppliers, and the pipeline and storage operators' ability to meet delivery commitments. Midstream also relies on third-party pipelines and other facilities to provide distribution choices to and from its facilities. Any disruption in the suppliers' performance might have an adverse impact on the company's financial performance.

Spire's operations are subject to a variety of environmental laws and regulations. Complying with the same raises operating costs, and failing to do so may result in the loss of needed permits and licenses, as well as fines, penalties or business interruptions. These charges might have a significant influence on the company's profitability.

SR Stock Price Movement
 

In the past month, SR shares have rallied 14.3% compared with the industry’s growth of 11.2%.

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Stocks to Consider
 

Some better-ranked stocks from the same sector are Atmos Energy Corp. ATO, Avangrid Inc. AGR and NiSource Inc. NI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atmos Energy’s long-term (three to five years) earnings growth rate is 7%. The Zacks Consensus Estimate for ATO’s fiscal 2025 EPS indicates an increase of 5% from the previous year’s reported number.

Avangrid’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for AGR’s 2024 EPS implies an improvement of 12% from the previous year’s reported number.

NiSource’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for NI’s 2024 EPS calls for an improvement of 8.1% from the previous year’s reported number.

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