Ross Fowler, an analyst from Bank of America Securities, maintained the Hold rating on Southwest Gas. The associated price target remains the same with $76.00.
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Ross Fowler has given his Hold rating due to a combination of factors influencing Southwest Gas’s financial outlook. The company’s second-quarter earnings per share (EPS) exceeded expectations, primarily due to adjustments related to the sale of Centuri stock. However, this transaction led to a tax expense that affected the overall financial results, although future tax expenses are expected to decrease following the disposition of the remaining Centuri stake.
Additionally, Southwest Gas reaffirmed its utility net income guidance for 2025 and outlined a substantial capital expenditure plan aimed at driving growth. Despite these positive indicators, the company’s stock price slightly exceeds the price objective set by the analyst, suggesting limited upside potential. Furthermore, the proceeds from Centuri sales are being used to reduce debt, which is a positive step but does not immediately enhance shareholder value. These elements combined justify the Hold rating, as the stock’s current valuation appears to be balanced between potential risks and rewards.
Based on the recent corporate insider activity of 42 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 SWX in relation to earlier this year.