UBS downgraded California Water Service to Sell from Neutral with a price target of $51, down from $59, following continued delays in the California rate case. Applying the outcome of the last rate case to the current one leads to a 5% reduction in earnings forecasts and a five-year growth rate to the water utility average 7.0% from 8.5%, the analyst tells investors in a research note. The firm says a delay in a final decision in the current case exposes California Water to volumetric risk because it prevents implementation of new decoupling mechanisms.
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