11:47 AM EST, 12/11/2024 (MT Newswires) -- California Water Service Group's ( CWT ) improving earnings visibility and higher capital expenditure plans for 2025 to 2028 are catalysts for share gains, BofA Securities said in a note Wednesday.

Despite this, the company trades at the lowest multiple among pure-play regulated water utilities in the US, the brokerage said. California Water Service Group ( CWT ) trades at a 19% discount to the closest peer, American States Water (AWR), according to BofA.

The firm also said that California Water Service Group's ( CWT ) pending 2024 general rate case covering rates for 2026 to 2028 in California "shows a step change in growth investment, achievable with a balance sheet that is slightly over-equitized currently."

BofA said the company can achieve earnings growth of 8% to 10% through 2028 and continue the trajectory after getting rate case finality, even if the capex, which is nearly twice the size of 2022-2024 capex, faces disallowance or trimming down risk in the rate case approval.

BofA initiated the company's coverage with a buy rating and a $57 price objective, which implies a 17% upside potential.

Price: 48.79, Change: +0.15, Percent Change: +0.31