Shares of Consolidated Water Co. jumped Tuesday morning after a drop in recent sessions, due in part to disappointing earnings, led an analyst to boost her rating.
The stock gained $1.31, or 7.8 percent, to $18.07, after hitting a two-year low of $16.26 earlier in the day.
The jump was in sharp contrast to deep losses on broader indexes after the Labor Department said wholesale inflation rose in April and crude oil prices touched yet another all-time high
On May 12 the Cayman Islands-based company said its first-quarter profit dropped more than 50 percent due in part to a contract dispute with the government of the British Virgin Islands. The stock shed 22 percent in the days following the report.
Janney Montgomery Scott analyst Debra G. Coy said the contract resolution does not appear likely within the next few weeks but upgraded shares to "Neutral" from "Sell," partly because of their new value near her $18 price target.
"A favorable resolution in the British Virgin Islands and success on potential growth ventures could provide significant upside, but we lack visibility on these items for now," Coy said in a note to clients.
If contract negotiations break down, Consolidated Water may be forced to record certain asset-impairment charges, she said.
For the second quarter, Coy expects earnings of 15 cents per share. Analysts polled by Thomson Financial expect, on average, earnings of 19 cents per share for the period.
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