Goldman Sachs Upgrades American Water (AWK) to Conviction Buy, Sees 19% Upside

September 20, 2012 7:14 AM EDT
Get Alerts AWK Hot Sheet
Price: $71.93 +0.08%

Rating Summary:
    10 Buy, 6 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Goldman Sachs upgraded American Water (NYSE: AWK) from Neutral to Conviction Buy with a price target of $42.00 (from $40.00), suggesting 19% upside with the dividend.

Despite outperforming the S&P 500 over the past 3 years, the firm sees even more upside, especially after its 7% pullback (vs. S&P500 +5%) since its August highs.

Goldman said the company will benefit from: (1) above average rate base growth as the company invests in replacing aged water infrastructure; (2) recently granted rate increases; and (3) improving cash flow, which will mitigate equity needs.

For an analyst ratings summary and ratings history on American Water click here. For more ratings news on American Water click here.

Shares of American Water closed at $36.37 yesterday.

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