WTRG Should I Buy
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Essential Utilities Inc (WTRG) is not a strong buy at this time for a beginner investor with a long-term strategy. While the company has shown solid financial growth in the last quarter and has positive news surrounding its merger, the stock's technical indicators and recent analyst downgrades suggest caution. The SwingMax signal indicates a short-term swing trade opportunity, but this does not align with the user's long-term investment preference.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is in a neutral zone, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5), suggesting a lack of strong upward trend. The current price is near the resistance level (R2: 39.658), which could limit further short-term upside.
Strong shareholder approval for the merger with American Water, indicating market confidence.
Significant revenue and net income growth in Q3 2025 (9.58% and 32.67% YoY, respectively).
Hedge funds are actively buying, with a 4551.57% increase in buying activity last quarter.
Recent downgrade by Barclays to Underweight with a reduced price target of $38 due to concerns about state-level merger proceedings and affordability issues.
Bearish moving averages and limited short-term upside based on technical indicators.
Gross margin decline (-2.03% YoY in Q3 2025).
In Q3 2025, Essential Utilities reported a 9.58% YoY revenue increase to $476.97M, a 32.67% YoY net income increase to $92.08M, and a 32% YoY EPS growth to $0.33. However, gross margin declined by 2.03% YoY to 72.83%.
Analyst sentiment is mixed. Barclays recently downgraded the stock to Underweight with a $38 price target, citing concerns about merger proceedings and affordability issues. However, Northcoast upgraded the stock to Buy earlier in December 2025 with a $42 price target.
