ReElement Technologies stock soars after securing $1.4B government deal
Investing.com - BofA Securities raised its price target on H2O America (NASDAQ:HTO) to $59.00 from $58.00 on Thursday, while maintaining a Buy rating following the water utility’s third-quarter earnings report. The new target suggests significant upside from the current price of $46.59, with InvestingPro data showing the stock is trading near its 52-week low of $44.91 and appears slightly undervalued based on Fair Value estimates.
H2O America reported third-quarter earnings per share of $1.27, exceeding the consensus estimate of $1.18. The company narrowed its full-year 2025 guidance to the high end of its previously announced $2.90-$3.00 EPS range, with a midpoint of $2.98. This guidance aligns closely with analysts’ FY2025 EPS forecast of $2.92.
The water utility continues to project long-term EPS growth toward the high end of its 5%-7% guidance range through 2029, excluding impacts from its Quadvest acquisition. Management expects the Public Utility Commission of Texas to make a final determination on Quadvest’s fair market value around year-end.
BofA Securities views H2O America shares as attractively priced at a 20% discount to peers despite what it describes as solid execution and a strong track record versus guidance. The firm updated its EPS forecasts to $2.97 for 2025, $3.15 for 2026, $3.34 for 2027, and $3.41 for 2028. InvestingPro data reveals H2O America has an impressive dividend history, having maintained payments for 54 consecutive years and raised dividends for 32 straight years, with a current yield of 3.61%.
The price target increase reflects a mark-to-market adjustment for average water utility multiples and higher projected 2027 earnings per share, according to BofA Securities. Despite recent market pressure with the stock down 8.18% over the past week, H2O America trades at a P/E ratio of 16.08, which analysts at InvestingPro note is relatively high compared to its near-term earnings growth prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.