Essential Utilities initiated with a Buy at Jefferies

Jefferies initiated coverage of Essential Utilities with a Buy rating and $44 price target The firm forecasts a 7% 2024-2028 EPS compound annual growth rate, which it notes is above the 6.2% consensus call and at the top-end of the historical 5%-7% guidance range. This view is supported by 8.5%-9.0% rate base growth less about 2.5 points in equity dilution, as the firm argues the strong Pennsylvania gas approved settlement sets a favorable stage for the state water case, with a settlement likely soon.