UPDATE: Global Hunter Securities Downgrades American Water (AWK) to Accumulate
Global Hunter Securities downgraded American Water (NYSE: AWK) from Buy to Accumulat with a price target of $56 (from $52). The change follows Q3 results.
Analyst Walt Liptak said, "We are lowering our Q4:14 revenue by $3MM to account for the lower capex and our Q4:14 EPS is up $0.03 to $0.49 from $0.46 due to better O&M expense management. Our 2015 revenue estimates take into account new rate case filings, surcharges, increased military revenue and benefits from NJ's consolidated tax adjustment, but we are tweaking our estimates to reflect uncertainties related to weather. Our 2015 sales estimates are now $3.22B from $3.26B and 2015 EPS is $2.60 from $2.61. We are increasing our price target to $56 from $52, which equates to 2015 EV/EBITDA multiple of 10.2x. AWK is a great efficiency improvement story, but we are lowering our rating to Accumulate from Buy due to the valuation, which is above the water utility group average of 9.5x."
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 $51.99 yesterday.