Oct. 2 at 7:24 PM
Barclays initiated coverage of Essential Utilities Inc. with an Overweight rating and a
$42 price target, citing stable growth in its regulated water and gas businesses. Analysts highlighted long-term rate base expansion driven by Aqua and Peoples Gas, supporting top-end EPS CAGR of 5–7% through 2027. Pennsylvania accounts for roughly 75% of the rate base and has historically been favorable. Barclays expects a positive credit outlook over the next six months as the company funds expansion via equity while managing leverage. Potential growth through M&A, targeting municipal water assets with roughly 50/50 debt-to-equity financing, was also noted. Upcoming earnings reports and regulatory updates in North Carolina, Ohio, Texas, and Virginia may act as catalysts. The stock trades at a 2027 P/E of 16.2x, about 6.7% below water peers and 5.3% below gas peers. Risks include regulatory setbacks, balance sheet pressures, and inflationary challenges.
$WTRG