California Water Service Group’s biggest subsidiary, California Water Service (Cal Water), has agreed to buy Skylonda Mutual Water Company’s water system assets. Currently, Cal Water serves about 2 million people in California.
The transaction is expected to close in 2022 and is subject to customary closing conditions and approval from the California Public Utilities Commission.
California Water Service (CWT) will be investing in Skylonda’s water infrastructure. Further, Cal Water plans to provide water utility services to Skylonda’s customers from its Bear Gulch District.
Cal Water’s President and CEO Marty Kropelnicki said, “We are pleased to enter into this agreement with Skylonda Mutual Water Company and appreciate its confidence in our expertise to serve its customers.”
Kropelnicki further added, “Skylonda’s proximity to our Bear Gulch District will enable us to provide safe, reliable, high-quality water service to its customers efficiently, and we look forward to providing them the same quality, service, and value that all of our customers have come to expect and deserve.” (See California Water Service stock analysis on TipRanks)
Last month, Robert W. Baird analyst Ben Kallo reiterated a Buy rating on the stock and raised the price target to $60 (10.8% upside potential) from $56.
Kallo said, “Our price target is based on a ~30 P/E multiple using our 2022 EPS estimate, which is in line with comps (average ~30x) and we believe justified given CWT’s track record of solid execution.”
Turning to the rest of the Street, the stock has a Hold consensus rating alongside an average analyst price target of $56.50 (4.3% upside potential). That’s based on 1 Buy, 1 Hold and 1 Sell. Shares have risen about 26.4% over the past year.
Related News:
PAR Technology’s Strong Bookings Drives 4Q Revenue Beat
Accel Entertainment’s 4Q Revenues Plunge 39%, Miss Estimates
Resonant 4Q Bottom Line Disappoints; Street Remains Bullish
