Analyst Ross Fowler from Bank of America Securities reiterated a Sell rating on Avista (AVA – Research Report) and increased the price target to $37.00 from $35.00.
Ross Fowler has given his Sell rating due to a combination of factors that highlight potential challenges for Avista. Despite a constructive FY25 guidance following favorable outcomes from the Washington rate case, concerns remain regarding Avista’s regulatory environment, which is perceived as less favorable. Additionally, the volatility in power supply costs, coupled with a weaker balance sheet and operational management issues, pose significant hurdles to the company’s execution of its strategies.
Another factor contributing to the Sell rating is the cautious outlook on Avista’s capital expenditure plans. Although there is potential upside in capital expenditure for resource adequacy by 2029, the current state of Avista’s balance sheet raises concerns about the ability to realize earnings growth from these investments. Furthermore, the potential earnings volatility from non-regulated business segments adds to the uncertainty, despite management’s guidance of no expected EPS impact. These elements together suggest a wait-and-see approach, supporting the underperform rating with a price objective of $37.
According to TipRanks, Fowler is a 3-star analyst with an average return of 1.2% and a 53.25% success rate. Fowler covers the Utilities sector, focusing on stocks such as Constellation Energy Corporation, American States Water, and Edison International.