Jefferies Downgrades Southwest Gas (SWX) to Underperform

Jefferies downgraded Southwest Gas (NYSE: SWX) from Hold to Underperform with a price target of $64.00.

Analyst Christopher Sighinolfi commented, "Ongoing sector consolidation, global uncertainty, and a quest for yield have driven investors to the gas utility space & resulted in equity valuations that are elevated on both a historical & relative basis. While we recognize the many attractive attributes offered by the gas LDC group, namely: regulated US-domiciled assets, USD-denominated (& positive!) dividend yields, IGrated balance sheets, and enhanced safety-related capital deployment opportunities, we believe valuations now offer a worrisome risk/reward skew. We note that only the group's dividend yield spread to US 10-yr Treasuries remains in normal ranges while its P/E multiple vs. the S&P 500 & EV/EBITDA multiple are >1 STD away from LT averages. Accordingly, we are downgrading NI, OGS, and SWX to Underperform on valuation."

For an analyst ratings summary and ratings history on Southwest Gas click here. For more ratings news on Southwest Gas click here.

Shares of Southwest Gas closed at $78.83 yesterday.

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