Ross Fowler, an analyst from Bank of America Securities, reiterated the Sell rating on Middlesex Water Company. The associated price target is $55.00.
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Ross Fowler has given his Sell rating due to a combination of factors related to Middlesex Water Company’s recent regulatory and financial developments. The company has filed for a significant rate increase in New Jersey, aiming for a 19.3% rise in base rates, which does not yet account for substantial upcoming capital expenditures related to plant upgrades. This indicates potential future financial pressures as the company seeks additional cost recovery measures.
Moreover, Middlesex’s recent settlement in Delaware resulted in a revenue increase that was less than half of what was initially requested, reflecting a lower return on equity than anticipated. These regulatory outcomes, coupled with affordability concerns within the water industry, have led to a cautious valuation approach. The price objective has been set slightly below the current market price, reinforcing the Underperform rating due to these financial and regulatory challenges.
Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MSEX in relation to earlier this year.