Thursday, December 3, 2020

Essential Utilities Inc. [WTRG] Stock trading around $43.20 per share: What’s Next?

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Essential Utilities Inc. [NYSE: WTRG] stock went on a downward path that fall over -0.94% on Friday, amounting to a one-week price decrease of less than -4.74%. The company report on August 11, 2020 that Essential Utilities Announces Pricing of Common Stock Offering with a Forward Component.

Essential Utilities Inc. (NYSE: WTRG) (“Essential”) announced today the pricing of a registered underwritten offering of 6,700,000 shares of its common stock at a price per share of $46.40. In connection with the forward sale agreement described below, subject to certain conditions, all shares are expected to be borrowed by the forward purchaser (as defined below) (or its affiliate) from third parties and sold to the underwriter and offered in connection with such forward sale agreement. RBC Capital Markets is acting as the sole book-running manager for this offering. The underwriter may offer shares of Essential’s common stock from time to time to purchasers directly or through agents, or through brokers in brokerage transactions on the NYSE, in the over-the-counter market, or to dealers in negotiated transactions, or in a combination of such methods of sale or otherwise, at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. Closing of this offering is expected to occur on or about August 13, 2020, subject to customary closing conditions.


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In connection with the offering, Essential entered into a forward sale agreement with an affiliate of RBC Capital Markets (in such capacity, the “forward purchaser”) under which Essential agreed to issue and sell to the forward purchaser 6,700,000 shares of its common stock. If Essential elects physical settlement of the forward sale agreement, it expects to use the net proceeds for general corporate purposes, including for water and wastewater utility acquisitions, working capital and capital expenditures.

Over the last 12 months, WTRG stock dropped by -2.00%. The one-year Essential Utilities Inc. stock forecast points to a potential upside of 11.84. The average equity rating for WTRG stock is currently 2.20, trading closer to a bullish pattern in the stock market.

The market cap for the stock reached $10.69 billion, with 254.17 million shares outstanding and 244.77 million shares in the current float. Compared to the average trading volume of 1.17M shares, WTRG stock reached a trading volume of 1372318 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Guru’s Opinion on Essential Utilities Inc. [WTRG]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for WTRG shares is $49.00 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on WTRG stock is a recommendation set at 2.20. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

BofA Securities have made an estimate for Essential Utilities Inc. shares, keeping their opinion on the stock as Buy, with their previous recommendation back on August 10, 2020. While these analysts kept the previous recommendation, Barclays raised their target price to Equal Weight. The new note on the price target was released on July 15, 2020, representing the official price target for Essential Utilities Inc. stock.

The Average True Range (ATR) for Essential Utilities Inc. is set at 0.99, with the Price to Sales ratio for WTRG stock in the period of the last 12 months amounting to 9.63. The Price to Book ratio for the last quarter was 2.37, with the Price to Cash per share for the same quarter was set at 0.03.

WTRG Stock Performance Analysis:

Essential Utilities Inc. [WTRG] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -4.74. With this latest performance, WTRG shares dropped by -5.84% in over the last four-week period, additionally sinking by -16.39% over the last 6 months – not to mention a drop of -2.00% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for WTRG stock in for the last two-week period is set at 40.16, with the RSI for the last a single of trading hit 31.29, and the three-weeks RSI is set at 43.71 for Essential Utilities Inc. [WTRG]. The present Moving Average for the last 50 days of trading for this stock 44.10, while it was recorded at 44.05 for the last single week of trading, and 44.71 for the last 200 days.

Insight into Essential Utilities Inc. Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and Essential Utilities Inc. [WTRG] shares currently have an operating margin of +40.76 and a Gross Margin at +47.50. Essential Utilities Inc.’s Net Margin is presently recorded at +25.24.

Return on Total Capital for WTRG is now 6.28, given the latest momentum, and Return on Invested Capital for the company is 3.99. Return on Equity for this stock inclined to 7.62, with Return on Assets sitting at 2.72. When it comes to the capital structure of this company, Essential Utilities Inc. [WTRG] has a Total Debt to Total Equity ratio set at 79.83. Additionally, WTRG Total Debt to Total Capital is recorded at 44.39, with Total Debt to Total Assets ending up at 32.76. Long-Term Debt to Equity for the company is recorded at 76.14, with the Long-Term Debt to Total Capital now at 42.34.

Reflecting on the efficiency of the workforce at the company, Essential Utilities Inc. [WTRG] managed to generate an average of $141,846 per employee. Receivables Turnover for the company is 8.52 with a Total Asset Turnover recorded at a value of 0.11.Essential Utilities Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.60 and a Current Ratio set at 0.70.

WTRG Stock EPS

With the latest financial reports released by the company, Essential Utilities Inc. posted 0.48/share EPS, while the average EPS was predicted by analysts to be reported at 0.44/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 9.10%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for WTRG. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Essential Utilities Inc. go to 6.40%.

Essential Utilities Inc. [WTRG] Insider Position Details

There are presently around $7,149 million, or 69.80% of WTRG stock, in the hands of institutional investors. The top three institutional holders of WTRG stocks are: VANGUARD GROUP INC with ownership of 25,515,898, which is approximately 6.633% of the company’s market cap and around 0.20% of the total institutional ownership; BLACKROCK INC., holding 22,921,140 shares of the stock with an approximate value of $990.19 million in WTRG stocks shares; and CANADA PENSION PLAN INVESTMENT BOARD, currently with $935.76 million in WTRG stock with ownership of nearly 0% of the company’s market capitalization.

Positions in Essential Utilities Inc. stocks held by institutional investors increased at the end of August and at the time of the August reporting period, where 255 institutional holders increased their position in Essential Utilities Inc. [NYSE:WTRG] by around 9,714,269 shares. Additionally, 250 investors decreased positions by around 13,470,719 shares, while 142 investors held positions by with 142,303,928 shares. The mentioned changes placed institutional holdings at 165,488,916 shares, according to the latest SEC report filing. WTRG stock had 62 new institutional investments in for a total of 1,597,143 shares, while 71 institutional investors sold positions of 5,969,504 shares during the same period.

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