American Water price target lowered to $126 from $147 at Guggenheim

Guggenheim analyst Shahriar Pourreza lowered the firm’s price target on American Water to $126 from $147 and keeps a Neutral rating on the shares. While the firm’s results showed utilities are approximately 5% cheaper now compared to its valuation models, this discount is insufficient to provide support for the group and attract incremental investors against the ongoing backdrop of macroeconomic risks, generational rate volatility, and tax loss selling that will remain prevalent in the near term, the analyst tells investors. Either a pullback in utility stocks or an increase in rate visibility is necessary before any incremental flows will happen, the firm believes.