Aqua America (WTR) Receives a Hold from Evercore ISI

By Jason Carr

Evercore ISI analyst Greg Gordon maintained a Hold rating on Aqua America (WTRResearch Report) on August 8 and set a price target of $37. The company’s shares closed on Friday at $43.04, close to its 52-week high of $43.19.

Gordon observed:

“We use a sum-of-the-parts approach to value WTR using a blend of water and gas multiples. At this current juncture, we think the stock trades above our bull-base valuation and we see limited near-term upside; our rating remains In Line. Earnings notes. 2Q19 adjusted EPS of $0.37 was flat to prior year. EPS growth from rate cases and customer growth (acquisitions/ organic) was offset by higher depreciation, lower consumption, and impact of repairs tax. 2019 capex is still expected to be ~$550mm and the company reaffirmed its $1.4bn capex plan through ’21, which supports 7% rate base growth in their legacy water business. The Y/Y customer growth rate is still expected to be between 2-3% for ’19 (from both organic growth and acquisitions). Peoples Gas update. Aqua still targets to close the Peoples Gas acquisition in fall of this year.”

According to, Gordon is a 4-star analyst with an average return of 9.9% and a 74.4% success rate. Gordon covers the Utilities sector, focusing on stocks such as Clearway Energy Inc, NRG Energy, and OGE Energy.

Aqua America has an analyst consensus of Moderate Buy, with a price target consensus of $42.75, representing a -0.7% downside. In a report issued on August 8, UBS also downgraded the stock to Hold with a $45 price target.

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Based on Aqua America’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $54.9 million. In comparison, last year the company had a net profit of $66.59 million.

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