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Investing.com - BofA Securities upgraded Southwest Gas (NYSE:SWX) from Neutral to Buy and raised its price target to $84.00 from $76.00. The stock, currently trading at $77.84, sits near its 52-week high of $80.54 and has delivered a 12.87% return year-to-date.
The upgrade reflects Southwest Gas’s improving risk/reward profile as the company sells its interest in Centuri Holdings (NYSE:CTRI) and redirects capital into its core utility business. The company’s conservative profile is evidenced by its low volatility (Beta 0.47) and impressive 55-year track record of consecutive dividend payments, as highlighted by InvestingPro.
According to BofA Securities, this strategic transition will lead to higher earnings and rate base growth for Southwest Gas, ultimately resulting in an improved valuation for the company.
BofA Securities analyst Ross Fowler adjusted earnings per share estimates for Southwest Gas in conjunction with the rating upgrade and price target increase.
The firm’s new $84.00 price target represents an increase of approximately 10.5% from the previous target of $76.00, signaling increased confidence in Southwest Gas’s future performance following its strategic repositioning.
In other recent news, Southwest Gas Holdings Inc. reported its second-quarter earnings for 2025, showcasing an earnings per share (EPS) of $0.53, which exceeded analysts’ expectations of $0.39. Despite this positive EPS result, the company’s revenue did not meet forecasts, reaching $1.12 billion compared to the anticipated $1.17 billion. Additionally, Southwest Gas Holdings is involved in a secondary public offering of 15 million Centuri Holdings shares at $19.50 per share. This offering, set to close on August 11, 2025, includes an option for underwriters to purchase an additional 2.25 million shares within 30 days. As the selling stockholder in this transaction, Southwest Gas Holdings is facilitating the offering. These developments reflect the company’s recent strategic and financial activities.
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