On Wednesday, Jefferies maintained a positive outlook on UGI Corporation (NYSE:UGI) shares, raising the price target to $33.00 from $28.00 while keeping a Buy rating on the stock. The firm highlighted UGI's confidence in its turnaround strategy, emphasizing the company's expected progress by December 2025.
According to InvestingPro analysis, UGI appears undervalued at its current price of $28.53, with the stock showing strong momentum through a 29% gain over the past six months.
UGI Corporation's strategy involves several key initiatives aimed at improving performance. The company plans to make near-term hires to bolster the execution at its AmeriGas division. Furthermore, UGI's strategy includes divesting international assets and realizing potential upside in gas marketing.
Another aspect of the strategy is the refinancing of its 2026 debt, which Jefferies believes will contribute to a near-term re-rating of the stock. InvestingPro data reveals the company maintains a solid dividend yield of 5.26% and has increased its dividend for 32 consecutive years, demonstrating strong shareholder commitment despite current challenges.
The analyst from Jefferies expressed optimism about UGI's future, citing the company's ongoing efforts to execute its strategy effectively. The firm's raised price target from $28 to $33 is based on the belief in the company's gas thesis and its potential for a re-rating in the near term.
In the statement provided, the analyst remarked, "UGI (+) struck confidence on its turnaround, pointing to meaningful progress by Dec. 2025. Near-term hires will drive continued AmeriGas execution, along with International divestments, potential upside on gas marketing, and refinancing of 2026 debt will continue to drive a near-term re-rating, in our view. Reit Buy on re-rating potential."
UGI Corporation's focus on these strategic areas aims to enhance the company's performance and shareholder value. The positive stance from Jefferies reflects the firm's confidence in UGI's ability to achieve its objectives and strengthen its position in the market.
With a GOOD Financial Health Score and analysts expecting net income growth, detailed analysis available on InvestingPro reveals 12 additional key factors that could impact UGI's future performance.
In other recent news, UGI Corporation has reported a record adjusted diluted earnings per share (EPS) of $3.06 for the fiscal year 2024, marking a significant milestone with a 5-year compound annual growth rate (CAGR) of 6%.
The company also achieved record earnings before interest and taxes (EBIT) across three of its business segments, attributed to increased margins and sustained cost savings. In a demonstration of UGI's commitment to its shareholders, approximately $320 million was distributed as dividends.
UGI Corporation has also made substantial investments in its natural gas businesses, including infrastructure, renewable natural gas (RNG) projects, and liquefied natural gas (LNG) facilities. The company's Regulated Utilities segment added over 12,000 customers, reaching a total of 962,000, while its Midstream and Marketing segment achieved a record EBITDA of $313 million. UGI International also delivered a record EBIT of $323 million.
However, AmeriGas, another segment of UGI, witnessed a 10% decline in LPG volumes and a $119 million reduction in total margin. The company recorded a non-cash pre-tax goodwill impairment charge of approximately $195 million for AmeriGas. Looking ahead, UGI Corporation anticipates an adjusted diluted EPS for fiscal 2025 to range between $2.75 and $3.05.
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