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 AWR, and raised its price target from $45.00 to $48.00. Ladenburg Thalmann noted, “We Maintain our BUY rating and Increase Our 1-Yr. Price Target to $48. Following significant price appreciation – up 26%, AWR'S YTD return tops all U.S. regulated utilities, including gas and electric - we believe risk/reward is better calibrated, but upside still remains. 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.