UPDATE: Ladenburg Thalmann Reiterates Buy Rating, Raises PT on American States Water
In a report published Monday, Ladenburg Thalmann Financial Services reiterated its Buy rating on American States Water Company (NYSE: AWR), and raised its price target from $45.00 to $48.00.
Ladenburg Thalmann noted, “AWR continues to trade at a 10% discount to U.S. water utilities on a forward earnings basis. Over the last 10 years, shares have traded at an average 8% discount, which we believe is reflective of higher earnings volatility in the ASUS business and less robust organic rate base growth opportunities. We believe a valuation gap will persist, but that shares still have more than 12.5% upside over the next 12 months, based on our discounting of 2015E EPS (target derivation described in detail on the following page). Recent multiple expansion has been driven by a combination of the apparently sustainable) turnaround of the military business (which has not only improved earnings but market credit for those earnings) and growing investor comfort with/understanding of California regulatory policies, which we maintain are constructive. We do not expect these factors to change.”
American States Water Company closed on Friday at $43.75.
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