In a report released today, Ross Fowler from Bank of America Securities upgraded Southwest Gas to a Buy, with a price target of $84.00.
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Ross Fowler has given his Buy rating due to a combination of factors that highlight Southwest Gas’s growth potential and improved financial positioning. The company’s decision to divest its interest in Centuri Holdings and reinvest in its core utility operations is expected to enhance earnings and rate base growth, leading to a better valuation. This strategic move is anticipated to clear a significant investor concern, thereby improving the stock’s attractiveness.
Additionally, Southwest Gas is currently trading at a discount compared to its peers, which is seen as unjustified given its stronger balance sheet and expected earnings growth. The upcoming updates on the Great Basin expansion project and a favorable regulatory environment further bolster the company’s prospects. Consequently, the price objective has been raised, reflecting an optimistic outlook on the company’s future performance and positioning the stock as an appealing investment opportunity.