Avista ( NYSE: AVA ) -8.1% in Tuesday's trading after reporting a surprise Q3 GAAP loss and cut its earnings forecasts for 2022 and 2023, saying "the pressures of inflation and rising interest rates are too much to offset."
For FY 2022, Avista ( AVA ) cut earnings guidance to $1.88-$2.08/share from $1.93-$2.13/share previously, still in line with analyst consensus estimate $1.95.
For FY 2023, the utility now sees EPS of $2.27-$2.47, cut from previous guidance of $2.42-$2.62, compared with $2.45 consensus, citing higher O&M and higher borrowing costs.
KeyBanc downgraded shares to Underweight from Sector Weight with a $33 price target, noting Avista ( AVA ) is locked into a two-year settlement in Washington that was reached "before the true magnitude of inflation and higher borrowing costs became apparent."
"As a result, the company will have limited opportunities to improve recovery until 2025, outside of potential revenue increases in Idaho and Oregon," Avista's ( AVA ) smaller jurisdictions; Washington state represents ~60% of the utility's business.
Avista's ( AVA ) stock price return shows a 10% YTD loss and a 7% decline during the past year .
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Avista plunges after posting Q3 loss; KeyBanc cuts to Sell equivalent