Citi Upgrades Southwest Gas (SWX) to Buy on Growth Outlook

Citi Upgrades SWX to Buy with $99 Target

Citigroup has upgraded its rating for Southwest Gas Holdings Inc (NYSE:SWX) to Buy from Neutral, setting a new price target of $99. The financial services firm also placed the utility stock on its positive catalyst watch list, signaling strong short-term expectations.

Accelerated Growth Projections

The upgrade is driven by an outlook for accelerated long-term profit growth. Citi projects an annual EPS growth of approximately 10.4% through 2030 and 8.8% through 2032, significantly higher than the company's previous target of 7%. Key factors include pipeline expansion projects and favorable regulatory conditions.

Potential Market Impact

This positive reassessment suggests that Southwest Gas may be undervalued compared to its peers. The anticipated faster earnings growth could help close this valuation gap, attracting further investor interest ahead of the company's fourth-quarter results announcement.

Forward Outlook

Investors will now closely monitor Southwest Gas's official fourth-quarter earnings report and its forthcoming EPS growth guidance, which Citi anticipates will confirm its optimistic projections and potentially boost the stock's performance.

FAQ

Q: Why did Citi upgrade Southwest Gas (SWX)?
A: Citi upgraded SWX based on expectations of faster EPS growth, driven by pipeline expansion and supportive regulatory tailwinds.

Q: What is the new price target for SWX?
A: The new price target set by Citi is $99 per share.

Source: Investing.com