UGI stock price target raised to $38 by Jefferies

On Thursday, Jefferies analyst Julian Dumoulin-Smith increased the price target for UGI Corporation (NYSE:UGI) to $38.00, up from the previous target of $35.00, while reiterating a Buy rating on the stock. The adjustment comes after a review of the company’s first-quarter fiscal year 2025 performance and management commentary from a recent conference. The new target represents potential upside from the current stock price of $33.15, with InvestingPro data showing the stock has already delivered an impressive 41.39% return over the past six months.

Dumoulin-Smith’s report highlighted UGI’s subsidiary AmeriGas’ accelerated debt repayment efforts, including the paydown of debt due in 2026 and some due in 2027. This financial maneuvering is expected to contribute to a modest growth in EBITDA beyond the fiscal year 2025, building upon the company’s current EBITDA of $1.86 billion. The analyst maintained an earnings per share (EPS) forecast of $3.06 for FY25, consistent with previous estimates. According to InvestingPro, UGI currently trades at an attractive P/E ratio of 12.81, suggesting a relatively low earnings multiple compared to peers.

The revised outlook includes increased EPS estimates for future fiscal years, attributing the change to lower corporate expenses and the benefits of debt repayment. The analyst predicts approximately 3%, 1%, and 1% increases in EPS for fiscal years 2026, 2027, and 2028, respectively.

In the report, Jefferies also updated valuations for UGI’s Utilities and Midstream segments and suggested that there is potential for AmeriGas’ valuation multiple to expand from a current 4 times to a range of 6 to 7 times, based on an improved credit outlook.

The new price target of $38.00 implies a total shareholder return of approximately 19%, signaling Jefferies’ confidence in the stock’s potential for growth. UGI Corporation shares are being watched closely by investors following the updated financial outlook and price target revision from Jefferies.

In other recent news, UGI Corporation has announced a series of significant developments. The company appointed Julie Fazio as the new President of its subsidiary, UGI International. Fazio’s rise within the company has been notable, with her previous role as Vice President of Supply and her oversight of LPG operations in France and Belgium. Additionally, UGI’s indirect subsidiary, AmeriGas Propane, L.P., has amended its credit agreement to adjust liquidity covenants, a move aimed at enhancing financial flexibility ahead of the maturity of its 2025 Senior Notes.

In another strategic financial decision, UGI’s subsidiaries, AmeriGas Partners, L.P. and AmeriGas Finance Corp., plan to redeem all outstanding 5.500% Senior Notes due 2025. This redemption aligns with the company’s ongoing financial management strategy. Meanwhile, UGI Corporation’s recent Annual Meeting of Shareholders resulted in the election of all ten board nominees and the approval of executive compensation, indicating strong shareholder support. The appointment of KPMG LLP as the independent auditor for fiscal year 2025 was also ratified.

In analyst coverage, Jefferies has raised the price target for UGI Corporation to $35.00, maintaining a Buy rating. Analyst Julian Dumoulin-Smith cited a positive outlook driven by expected strong performance and ongoing strategic initiatives. The revised earnings per share estimates reflect this optimism, highlighting UGI’s efforts in cost reduction and focus on the natural gas business. These developments collectively underscore UGI’s strategic focus and operational adjustments in the energy sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.