- South Jersey Industries (SJI +0.2%) is initiated with an Equal Weight rating and $32 price target at Morgan Stanley, which says risks associated with SJI's non-utility businesses and a major project have led to a balanced risk-reward.
- SJI has a robust, high growth gas utility business, with a robust capex for 2016-20, timely capital recovery and above average customer growth, the firm says.
- But Stanley says two offsetting dynamics drive its Equal Weight rating: execution risk at the PennEast pipeline, and greater dependency on earnings and growth at non-utility businesses, which have higher risk and should merit lower multiples.