Northwest Natural Holding (NWN) has been drawing investor attention after a recent stretch of positive share performance, with the stock up over the past week, month and year. That price action now aligns with solid reported fundamentals.
The recent upswing in Northwest Natural Holding’s share price, including a 4.09% 7 day share price return and 6.12% 30 day share price return, comes after a softer patch over the past quarter. Yet the 9.36% 1 year total shareholder return signals that momentum has been rebuilding rather than fading in the backdrop of its current US$49.92 share price.
Scan similar utilities that are showing rebuilding momentum and fundamentals with our curated list of 30 resilient stocks with low risk scores.
After that rebound, the question is simple: Does Northwest Natural Holding at US$49.92 still lag a fair value range that stretches from its analyst target to intrinsic estimates, or has the recent move already closed most of that gap?
Most Popular Narrative: 13% Undervalued
On the most followed narrative, Northwest Natural Holding screens as undervalued, with a fair value estimate of $57.40 against the latest $49.92 close, which puts the recent rally in a different light.
Progress on the fully contracted MX3 gas storage expansion, a roughly US$300 million project with 4 to 5 Bcf of incremental capacity, 25 year contracts and a fixed 12.5% allowed ROE, is expected to adjust Northwest Natural Holding’s EPS growth framework upward once notice to proceed is secured and the project enters service.
See why 7 investors see Northwest Natural Holding as 13% undervalued.
Result: Fair Value of $57.40 (UNDERVALUED)
Still, investors need to weigh the risk that higher operating and interest costs, along with policy driven electrification, could pressure Northwest Natural Holding’s long term earnings narrative.
Find out about the key risks to this Northwest Natural Holding narrative.
Another View: Cash Flows Point The Other Way
There is a catch. While the popular narrative paints Northwest Natural Holding as 13% undervalued on earnings based fair value of $57.40, the SWS DCF model points to an intrinsic value of $40.52. This would leave the current $49.92 share price looking overvalued instead.
This kind of gap between an earnings based framework and a cash flow driven estimate does not make either method right or wrong. It pushes you to ask which set of assumptions you trust more for Northwest Natural Holding’s future cash generation, regulatory outcomes and capital needs.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Northwest Natural Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 29 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed messages on Northwest Natural Holding’s value story so far. Consider acting while sentiment is fluid and weigh the 3 key rewards and 2 important warning signs against your own read of the data.
Looking for more investment ideas beyond Northwest Natural Holding?
If Northwest Natural Holding has sharpened your interest, do not stop here. Broaden your watchlist now and give yourself more options before the next move.
- Target resilient compounding potential by scanning companies on the 5 dividend fortresses that may support more predictable income.
- Hunt for quality at a discount by reviewing the 29 high quality undervalued stocks that pair strong fundamentals with attractive pricing.
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