American Water Works Company, Inc. (AWK) is a leading player in the water and wastewater services sector, boasting a market cap of $28.9 billion. Based in Camden, New Jersey, the company operates an extensive infrastructure, providing essential services to approximately 3.5 million customers across 14 states.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and American Water Works fits this criterion perfectly. AWK stands out in the market for its significant presence across both civilian and military sectors, operating a vast network of water and wastewater facilities under long-term contracts and emphasizing strong sustainability practices.
However, the water utility company is down marginally from its 52-week high of $149.78, achieved on Sep. 16. Despite this, shares of AWK have surged 15.3% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) marginal decline in the same period.
Nevertheless, in the longer term, AWK is up nearly 13% on a YTD basis, lagging behind the NASX's 17.2% gains. Shares of American Water Works have increased 7.3% over the past 52 weeks, compared to NASX's 28.3% return over the same time frame.
Meanwhile, AWK has been trading above its 50-day and 200-day moving averages since May, indicating a bullish price trend.
Despite missing EPS estimates for Q2 on Jul. 31, shares of AWK rose 1.5% the following day because the company reported better-than-expected revenue of $1.2 billion, reflecting strong operational performance. The completion of five acquisitions and the addition of 33,400 new customers highlighted growth potential, while the revised EPS guidance and substantial billion capital investment plan for 2024 reassured investors of continued long-term growth.
In comparison with its rival, Essential Utilities, Inc. (WTRG) has underperformed compared to AWK. Shares of Essential Utilities have risen 4.7% over the past 52 weeks and 5.7% on a YTD basis.
Given AWK's weak price action over the past year, analysts remain cautiously optimistic about its prospects. With 11 analysts covering the stock, there is a consensus rating of "Moderate Buy," and it is currently trading above the mean price target of $143.33.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
