SJW Group SJW improved its financial and regulatory execution, which provides "a clear and achievable growth story," according to BofA Securities.

The SJW Group Analyst: Analyst Ross Fowler upgraded the rating for SJW Group from Neutral to Buy, while cutting the price target from $59 to $55.

The SJW Group Thesis: The stock is currently trading at a 15% discount to peers, representing the lowest multiple "of any pure-play U.S. water utility," Fowler said in the upgrade note.

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"We think the company’s improved EPS consistency and constructive regulatory outcomes set up SJW to execute against its long-term 5%-7% EPS guidance range," he added.

Eversource Energy ES announced it will proceed with a sale of Aquarion to the state of Connecticut, which "bodes well for SJW as it removes a near-term overhang and should allow for multiple expansion," the analyst stated.

"We think SJW ultimately would benefit for added scale and the team showed its discipline in the Aquarion process, but the risk of future M&A may be higher for SJW than some of its peers," he further wrote.

SJW Price Action: Shares of SJW Group had risen by 2.63% to $51.55 at the time of publication on Monday.

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