UPDATE: Berenberg Upgrades Evoqua Water Technologies Corp. (AQUA) to Buy
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Berenberg analyst Andrew Buscaglia upgraded Evoqua Water Technologies Corp. (NYSE: AQUA) from Hold to Buy with a price target of $34 (from $25).
The analyst commented, "Underappreciated secular tailwinds ahead; upgrading AQUA to Buy: AQUA is the largest pure play water treatment company in the U.S. and, in our view, well-positioned to benefit from more stringent environmental regulations ahead. We think regulation around emerging contaminants will prompt billions in spending on treatment equipment over the next 5-10 years, providing a strong secular tailwind for AQUA. More regulations coupled with higher costs (labor) should only fuel the trend of customers outsourcing their water operations and seeking automation solutions, which AQUA provides. We increase our 2022-2023 estimates, which now assumes growth of 7.1% and 9%, well above consensus at ~4.5% growth per year. In a bull case, we see double-digit growth ahead with M&A. As sales accelerate, we expect AQUA's multiple to expand towards its water peers. We raise our price target to $34 (from $25), implying 35% potential upside, and upgrade AQUA to Buy (from Hold)."
Shares of Evoqua Water Technologies Corp. closed at $25.24 yesterday.
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