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Investing.com - BofA Securities has reduced its price target on Essential Utilities, Inc. (NYSE:WTRG) to $41.00 from $43.00 while maintaining a Buy rating on the stock. Currently trading at $37.40, the stock sits below the consensus analyst target range of $42-$56, according to InvestingPro data.
The firm continues to view Essential Utilities as undervalued compared to its peers on a sum-of-the-parts basis, citing the company’s cleaner earnings profile, more achievable guidance plan, and fewer regulatory affordability challenges. The company maintains a "Fair" overall financial health score and has demonstrated strong dividend reliability, having raised dividends for 32 consecutive years.
BofA Securities believes that Peoples gas in Pittsburgh presents long-term opportunities to participate in datacenter development related customer growth, though it does not expect material financial impacts during the current forecast period.
The research firm is looking for evidence of execution in both financing and operational areas throughout 2025 to drive multiple re-rating, noting that the company faces few regulatory risks or other catalysts.
Despite the price target reduction, BofA Securities has reiterated its Buy rating on Essential Utilities stock, indicating continued confidence in the company’s overall value proposition.
In other recent news, Essential Utilities Inc. reported its first-quarter 2025 financial results, which surpassed market expectations. The company achieved an earnings per share (EPS) of $1.30, significantly beating the forecasted $0.81, and reported revenue of $783.6 million, exceeding the anticipated $690 million. This reflects a 28% increase in revenue year-over-year, driven by regulatory recoveries and stable operational expenses. Additionally, Essential Utilities reaffirmed its 2025 EPS guidance range of $2.07 to $2.11.
In the realm of corporate governance, Essential Utilities held its Annual Meeting of Shareholders, where several key proposals were addressed. Shareholders elected seven directors for one-year terms and approved executive compensation for 2024. The appointment of PricewaterhouseCoopers LLP as the independent auditor for fiscal year 2025 was also ratified by a substantial majority.
The company continues to focus on innovation, notably with the rollout of advanced gas meters, and is exploring new market opportunities, such as data center power generation. Essential Utilities is also actively managing regulatory activities, implementing rate increases in several states to support infrastructure investments. These developments highlight the company’s strategic focus on growth and operational efficiency.
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