Evercore ISI Downgrades American Water (AWK) to In Line, 'hard to ignore rate case risks for the balance of the year"

Evercore ISI analyst Durgesh Chopra downgraded American Water (NYSE: AWK) from Outperform to In Line with a price target of $135.00 (from $160.00).

The analyst commented: "AWK’s enviable long-term growth prospects (7-9% EPS growth supported by aging water infrastructure, water/waste consolidation opportunities and historically supportive regulatory backdrop) coupled with strong balance sheet (A/Baa1 rating at S&P/Moody’s) and execution have been core components of our bullish thesis since our coverage launch in 2018 (see our note here). Shares have materially outperformed peers since then (140% vs UTY 115%) and while we are confident in the company’s long term growth aspirations it’s hard to ignore rate case risks for the balance of the year. AWK has eight ongoing rate cases (pg 3.) including NJ and PA, which combined represent >50% of earnings power for the company by our estimate. PA rate case in particular has drawn investor attention where there has been more than normal pushback from various stakeholders and local
politicians. We are downgrading AWK to In Line with a $135 TP as
we see limited near-term upside in shares as investors seek clarity
on the filed rate cases"

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 $124.26 yesterday.

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