Barclays Starts Essential Utilities, Inc. (WTRG) at Overweight

Barclays analyst Nicholas Campanella initiates coverage on Essential Utilities, Inc. (NYSE: WTRG) with a Overweight rating and a price target of $42.00.

The analyst comments: "We initiate coverage of WTRG with an Overweight rating seeing the stock as a preferred way to gain exposure to the water industry. WTRG is a regulated water utility and LDC gas company that operates in several states throughout the US. WTRG's valuation is driven by a LT rate base CAGR of ~8% through FY29, which is supported by a capital plan of ~$7.8bn through FY29, a key driver our EPS CAGR estimate of ~7% through 2027, which is at the high end of WTRG 5-7% EPS CAGR. WTRG's rate base is driven by Aqua which is increasing at a 6% CAGR, and Peoples Gas which has an 11% CAGR. Pennsylvania is ~75% of the rate base between the water and gas business, historically a favorable jurisdiction for WTRG and a key driver of WTRG's EPS CAGR of 5-7%. We see positive catalysts from the upcoming 4Q25 earnings call where we expect management will provide a new guidance refresh, regulatory catalyst in NC, OH, TX, and VA where the company has set a precedence of effectively navigating regulatory risk, a robust M&A pipeline that is highlighted by the pending DELCORA acquisition."

For an analyst ratings summary and ratings history on Essential Utilities, Inc. click here. For more ratings news on Essential Utilities, Inc. click here.

Shares of Essential Utilities, Inc. closed at $38.82 yesterday.

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