With a market cap of $27.1 billion, New Jersey-based American Water Works Company, Inc. (AWK) is a prominent provider of water and wastewater services in the U.S. The company manages a vast infrastructure that includes treatment plants for surface water and groundwater, wastewater treatment facilities, extensive networks of pipelines, pumping stations, and storage facilities. The utility company intends to release its fiscal 2024 second-quarter financial results after the market closes on Wednesday, Jul. 31.
Ahead of the event, analysts expect AWK to report a profit of $1.50 per share, up 4.2% from $1.44 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in three of the past four quarters while missing on one other occasion.
Strategic initiatives focused on improving operational efficiency and regulatory compliance enhanced its performance in the previous quarter, resulting in a 4.4% year-over-year improvement in its EPS to $0.95. However, it fell short of the consensus EPS estimate by 4%.
For fiscal 2024, analysts expect American Water Works to report an EPS of $5.24, up 6.9% from $4.90 in fiscal 2023. Its fiscal 2025 EPS is projected to rise 8.4% annually to $5.68.
AWK stock has dipped 4.4% over the past 52 weeks, trailing behind both the broader S&P 500 Index's ($SPX) 25.6% rise and the S&P 500 Utilities Sector SPDR's (XLU) 5.9% increase over the same period.
American Water Works is the largest regulated water and wastewater utility company in the U.S. While AWK stock has underperformed in the broader market, it rose 2.3% after it released its Q1 earnings on May 1. Despite falling short of bottom-line consensus estimates, the company reported revenues of $1 billion, exceeding analysts' expectations by 6.4%. The company also affirmed its long-term financial targets, including its long-term EPS and dividend growth rate targets of 7% to 9%. This feat was driven by authorized revenue increases from completed general rate cases and infrastructure proceedings aimed at recovering capital and acquisition investments.
Analysts' consensus rating on American Water stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 11 analysts covering the stock, three recommend a "Strong Buy," one analyst suggests a “Moderate Buy,” and seven advise a "Hold."
The average analyst price target of $137.56 suggests a marginal upside potential from the current price levels. Its high street target of $159 indicates a potential upside of 16%.
On the date of publication, Kritika Sarmah 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.
