Bank of America: Centuri (CTRI.US) trade eliminates valuation pressure, raised Southwest Gas (SWX.US) rating to "neutral"

Bank of America Corp analyst Ross Fowler has upgraded his rating on Southwest Gas Holdings (SWX.US) from "underperform" to "neutral" with a target price increase from $69 to $74. The Bank of America report notes that with Southwest Gas taking initial measures to ease the valuation pressure from the upcoming spin-off of its utility infrastructure services company Centuri (CTRI.US), the company's risk-return profile has become more balanced. The report also highlights an improving regulatory environment in Arizona. The bank also mentioned that Southwest Gas has completed a secondary offering of 9 million shares of Centuri stock (selling part of its stake) and simultaneously completed a $50 million private placement with investor Icahn. These transactions are estimated to bring Southwest Gas approximately $225 million in net proceeds, enough to cover its equity financing needs for the years 2025-2026.