Middlesex Water Faces Valuation Pressure: Analyst Flags Slowing Growth And Rising Regulatory Risks
Middlesex Water Faces Valuation Pressure: Analyst Flags Slowing Growth And Rising Regulatory Risks
The analyst acknowledges Middlesex Water's recent growth but does not see any catalyst for further share price appreciation, even with more aggressive capital expenditure assumptions.BofA Securities analyst Ross Fowler initiated coverage on Middlesex Water Company (NASDAQ:MSEX) with an Underperform rating and a price forecast of $56.
美銀證券分析師羅斯·福勒對米德爾賽克斯水務公司（納斯達克：MSEX）進行了覆蓋評級，給予其不推薦評級，目標價格爲56美元。
Fowler notes that Middlesex Water is the most expensive utility in their coverage, trading at a 47% premium to the utility group and a 13% premium to the water group.
福勒指出，米德爾賽克斯水務是其覆蓋範圍內最昂貴的公用事業公司，交易價格比公用事業組高出47%，比水務組高出13%。
Despite strong past growth, the analyst projects rate base and EPS growth to slow below the peer average, which, combined with increasing regulatory risk and uncertainty around capital spending, makes the current valuation unjustified.
儘管過去增長強勁，但分析師預計其資產基數和每股收益增長將低於同行平均水平，加上監管風險增加和資本支出不確定性，使得當前估值不合理。
The analyst acknowledges Middlesex Water's recent growth but does not see any catalyst for further share price appreciation, even with more aggressive capital expenditure assumptions.
分析師承認米德爾賽克斯水務近期的增長，但即使是在更激進的資本支出假設下，也沒有看到進一步股價上漲的催化劑。
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Fowler forecasts Middlesex Water's EPS to grow at a 5.2% CAGR from 2024 to 2027, with estimates of $2.34 in 2024, $2.45 in 2025, $2.59 in 2026, and $2.72 in 2027.
福勒預計米德爾賽克斯水務的每股收益將在2024年至2027年間以5.2%的複合年增長率增長，預計2024年爲2.34美元，2025年爲2.45美元，2026年爲2.59美元，2027年爲2.72美元。
The analyst forecasts capital expenditures to exceed guidance, driven by the national push for water quality investment, resulting in a 7.6% annual rate base growth through 2027.
分析師預計資本支出將超過指導原則，受到全國對水質投資的推送驅動，預計到2027年，年資產基數增長率將達到7.6%。
However, this is slower than the recent 15% rate base growth driven by one-time water quality investments.
然而，這一增長速度低於近期因一次性水質投資驅動的15%的資產基數增長。
Per the analyst, the focus on limiting water customer bill increases will restrict further upside for Middlesex Water, especially as the company relies more on frequent rate cases.
根據分析師的說法，限制水用戶賬單增加的重點將限制米德爾賽克斯水務公司的進一步上升，特別是該公司越來越依賴頻繁的費率案例。
Additionally, Middlesex Water may need to raise external equity starting in 2025, forecasting $25 million per year to bring its equity capitalization closer to authorized levels.
此外，米德爾賽克斯水務公司可能需要從2025年開始增加外部股本，預計每年需要2500萬美元，以使其股本資本化接近授權水平。
The analyst notes that Middlesex Water expects 4% customer growth in 2024, but acknowledges that economic conditions could make achieving that growth challenging.
分析師指出，米德爾賽克斯水務公司預計2024年客戶增長爲4%，但承認經濟狀況可能會使實現這一增長變得具有挑戰性。
The analyst assumes 4% growth for 2024, but adjusts it to 3% in their model.
分析師假設2024年增長爲4%，但在其模型中將其調整爲3%。
The analyst also points out that if growth slows down, it could negatively impact revenue and capital expenditure estimates.
分析師還指出，如果增長放緩，可能會對營業收入和資本支出預估產生負面影響。
Price Action: MSEX shares are trading lower by 1.66% to $60.31 at last check Wednesday.
價格動態：截至週三最後一次檢查，MSEX股票下跌1.66%，報60.31美元。
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Image via Shutterstock.
圖片來源：Shutterstock。