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Investing.com - UBS raised its price target on Essential Utilities, Inc. (NYSE:WTRG) to $47.00 from $42.00 while maintaining a Buy rating on the stock. The company, currently valued at $11 billion, has demonstrated strong financial health with a "GOOD" overall score according to InvestingPro metrics.
The firm cited Essential Utilities’ reiteration of guidance metrics, including long-term annual EPS growth of 5% to 7%, during management’s presentation at the UBS Kohler conference. The company has maintained a strong track record of dividend payments, having raised its dividend for 32 consecutive years, with a current yield of 3.51%.
UBS believes the company is on track to deliver 6.5% EPS growth with 8% rate base growth, positioning it well within the water utilities sector.
The analyst noted that the environment for small to medium municipal acquisitions in Texas and Pennsylvania appears attractive, with Pennsylvania implementing a merger purchase multiple guideline of 1.65x mandated by the PA Commission.
Water utilities currently trade at a 2 standard deviation discount to the mean relative FY 2 P/E to the S&P 500 since 2008, according to UBS.
In other recent news, Essential Utilities Inc. reported robust financial results for the second quarter of 2025. The company exceeded earnings expectations with an earnings per share (EPS) of $0.38, marking a 31.03% surprise over the anticipated $0.29. Additionally, Essential Utilities achieved revenue of $514.9 million, surpassing projections by 10.07%. These results highlight the company’s strong performance and strategic direction. Analysts and investors are likely to take note of these positive developments as they assess the company’s future potential. The favorable earnings and revenue figures are crucial for investors evaluating the company’s recent performance.
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