SJW - Water utility SJW cut at J.P. Morgan on narrower risk/reward after strong H2 gain

SJW Group ( NYSE: SJW ) -1.5% in Tuesday's trading as J.P. Morgan downgraded shares to Neutral from Overweight with an $84 price target, trimmed from $86, after the stock's strong H2 2022 performance that topped all major water utilities boosted its relative valuation.

JPM's Richard Sunderland sees the go-forward risk/reward for SJW ( SJW ) as narrower at current levels and moves to the sidelines "pending final CPUC cost of capital clarity, an update on inflation impacts to 2023 earnings, and additional CT regulatory execution."

Sunderland said he remains positive on SJW's ( SJW ) "long-term prospects and improving California regulatory mechanics, strong Texas growth and beneficial post-CTWS acquisition scaling."

Water utility stocks like SJW Group ( SJW ) historically and currently trade at higher P/E multiples than energy utilities, Robert Honeywill writes in an analysis published on Seeking Alpha .

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