Janney Montgomery Scott Upgrades American States Water (AWR) to Buy

May 19, 2009 11:47 AM EDT

Janney Montgomery Scott upgrades American States Water (NYSE: AWR) from Neutral to Buy.

Janney analyst says, "American States should show a strong earnings rebound in 2009, after sub-par earnings in 2008. The business began to get back on track at the end of 2008 and delivered 10% adjusted EPS growth in 1Q09, driven by regulatory relief in the core California utility and improved results in the military base contracts business. New regulatory mechanisms are proving valuable, maintaining revenue despite conservation and allowing the company to recover costs reflective of delivering service. We recognize risk in the contract operations business and pension cost headwinds, but believe the company can deliver 10%+ earnings growth this year, ex one-time items, driven mainly by regulatory relief. The stock has pulled back since mid-March highs and currently offers a total return of about 20% on our $37 fair value."

To see more analyst ratings on AWR Click Here.

American States Water Company (AWR) is the parent company of Golden State Water Company (GSWC), Chaparral City Water Company (CCWC), and American States Utility Services, Inc. (ASUS) and its subsidiaries (Fort Bliss Water Services Company (FBWS), Terrapin Utility Services, Inc. (TUS), Old Dominion Utility Services, Inc. (ODUS), Palmetto State Utility Services, Inc. (PSUS) and Old North Utility Services, Inc. (ONUS)).

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