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American Water
(NYSE:AWK)
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Rating:64Neutral
Price Target:
$134.00
▲(1.82% Upside)
Action:Reiterated
Date:06/10/26
The score is driven primarily by steady regulated earnings and growth outlook (including reaffirmed guidance and dividend growth), tempered by structurally negative free cash flow and elevated leverage that increase dependence on capital markets. Technicals are currently weak-to-neutral, while valuation and yield are supportive but not compelling enough to fully offset the financing/cash-flow constraints.
Positive Factors
Steady regulated revenue and margins
American Water’s core regulated business has delivered multi-year top-line expansion and stable mid-20% net margins. That durable rate‑base driven revenue and predictable margin profile underpins cash flow visibility and earnings resilience across regulatory cycles.
Negative Factors
Persistently negative free cash flow
Sustained negative free cash flow driven by heavy reinvestment means operating cash doesn't cover capital needs, creating ongoing dependence on external financing. Over months, this pressures liquidity planning and requires consistent access to debt/equity markets for infrastructure funding.
Read all positive and negative factors
Positive Factors
Negative Factors
Steady regulated revenue and margins
American Water’s core regulated business has delivered multi-year top-line expansion and stable mid-20% net margins. That durable rate‑base driven revenue and predictable margin profile underpins cash flow visibility and earnings resilience across regulatory cycles.
Read all positive factors
American Water Key Performance Indicators (KPIs)
Any
Revenue by Segment
Reveals how much revenue each business unit generates, highlighting the company's core strengths and potential areas for growth or vulnerability.
Reveals how much revenue each business unit generates, highlighting the company's core strengths and potential areas for growth or vulnerability.
Data provided by:
The Fly
The FlyAmerican Water (AWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.70B
Dividend Yield2.51%
Average Volume (3M)2.17M
Price to Earnings (P/E)23.4
Beta (1Y)-0.36
Revenue Growth8.10%
EPS Growth2.89%
CountryUS
Employees6,700
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)5.65
Shares Outstanding195,280,520
10 Day Avg. Volume2,462,960
30 Day Avg. Volume2,173,371
Financial Highlights & Ratios
PEG Ratio3.98
Price to Book (P/B)2.35
Price to Sales (P/S)4.95
P/FCF Ratio-23.85
Enterprise Value/Market Cap1.56
Enterprise Value/Revenue7.69
Enterprise Value/Gross Profit17.67
Enterprise Value/Ebitda14.29
Forecast
1Y Price Target
$132.29Price Target Upside0.51% Upside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)6.08
Revenue Forecast (FY)$5.36B
American Water Business Overview & Revenue Model
Company Description
American Water Works Company, Inc. operates across the United States, delivering essential water and wastewater solutions via its various subsidiary companies. Its operations extend to around 1,700 communities situated across 14 states, catering t...
How the Company Makes Money
American Water primarily makes money through (1) regulated utility revenues and (2) non-regulated (market-based) revenues.
1) Regulated utility revenues (core earnings driver): The majority of the company’s revenue is generated by its state-regul...
American Water Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call delivered multiple operational, regulatory and financial positives: affirmed 2026 guidance with an 8% EPS growth target, an 8.2% dividend increase and meaningful PFAS-related recoveries (~$185M). Strong financing execution ($700M at 5.2%), constructive legislative wins, a sizable acquisition pipeline ($565M / 105k connections) and ongoing regulatory progress (final orders in WV & MD; PA decision timeline) underpin confidence. Notable risks include higher O&M/depreciation/financing costs, back‑loaded EPS growth with much of upside in H2, unsettled PA rate case procedural risk, required multi-state approvals for the Essential merger, and upcoming equity/debt funding needs. Overall, positives materially outweigh the challenges described on the call.Positive Updates
Q1 Adjusted EPS and Full-Year Guidance Affirmed
Adjusted earnings of $1.01 per share in Q1 2026. Board reaffirmed 2026 adjusted EPS guidance of $6.02 to $6.12, implying ~8% EPS growth for the year versus 2025.
Negative Updates
Cost Pressures: O&M, Depreciation and Financing
Operations & maintenance, depreciation and financing costs increased in Q1 as expected; management noted these categories will continue to rise for the year and the majority of EPS growth is back-end loaded into H2 due to timing of authorized rate increases.
Read all updates
Q1-2026 Updates
Positive
Negative
Q1 Adjusted EPS and Full-Year Guidance Affirmed
Adjusted earnings of $1.01 per share in Q1 2026. Board reaffirmed 2026 adjusted EPS guidance of $6.02 to $6.12, implying ~8% EPS growth for the year versus 2025.
Read all positive updates
Company Guidance
American Water reaffirmed 2026 adjusted EPS guidance of $6.02–$6.12 (targeting 8% EPS growth vs. 2025) after reporting Q1 adjusted EPS of $1.01 and saying the majority of EPS growth will occur in H2 as new rates take effect (key Q3 increases; PA recommended decision expected in May with final order in July and rates effective in August; NJ intervenor testimony due June 22). The Board raised the quarterly cash dividend 8.2% to $0.8950 and continues to target 7%–9% annual dividend growth (aligned with a 7%–9% EPS growth target through 2030). Balance-sheet actions include a 58% total debt-to-capital ratio as of 3/31 after repaying a $795M HOS note, a $700M long‑term debt issuance at 5.2% on April 1, planned settlement of roughly $1B from an equity forward midyear, and an additional long‑term debt issuance planned for Q3/early Q4; ratings agencies expect FFO‑to‑debt to remain within thresholds. Other quantified items: ~$185M of net PFAS payments secured for customers, 105,000 customer connections under agreement totaling $565M to support a ~2% customer‑growth goal, completion of a $20M Nitro acquisition (>$40M planned capex over 5 years), Nexus approvals in 7 of 8 states with closing expected by June 30, and an expected close of the Essential merger by end of Q1 2027.American Water Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.21B | 5.14B | 4.68B | 4.23B | 3.79B | 3.93B |
| Gross Profit | 2.27B | 2.23B | 2.83B | 2.51B | 2.20B | 2.15B |
| EBITDA | 2.80B | 2.93B | 2.67B | 2.36B | 2.00B | 1.91B |
| Net Income | 1.10B | 1.11B | 1.05B | 944.00M | 820.00M | 1.26B |
Balance Sheet | ||||||
| Total Assets | 35.26B | 36.52B | 32.83B | 30.30B | 27.79B | 26.07B |
| Cash, Cash Equivalents and Short-Term Investments | 137.00M | 174.00M | 196.00M | 330.00M | 85.00M | 116.00M |
| Total Debt | 15.70B | 15.92B | 14.11B | 12.44B | 12.45B | 11.06B |
| Total Liabilities | 24.23B | 25.69B | 22.50B | 20.50B | 20.09B | 18.78B |
| Stockholders Equity | 11.04B | 10.84B | 10.33B | 9.80B | 7.69B | 7.30B |
Cash Flow | ||||||
| Free Cash Flow | -1.20B | -1.07B | -811.00M | -860.00M | -1.31B | -432.00M |
| Operating Cash Flow | 2.03B | 2.06B | 2.04B | 1.87B | 1.11B | 1.44B |
| Investing Cash Flow | -2.65B | -3.31B | -3.38B | -2.81B | -2.13B | -1.54B |
| Financing Cash Flow | 629.00M | 1.25B | 1.11B | 1.19B | 1.00B | -345.00M |
American Water Technical Analysis
Positive
131.61
Price Trends
126.54
Positive
129.68
Positive
130.39
Positive
Market Momentum
1.03
Negative
65.08
Neutral
93.13
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWK, the sentiment is Positive. The current price of 131.61 is above the 20-day moving average (MA) of 125.68, above the 50-day MA of 126.54, and above the 200-day MA of 130.39, indicating a bullish trend. The MACD of 1.03 indicates Negative momentum. The RSI at 65.08 is Neutral, neither overbought nor oversold. The STOCH value of 93.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AWK.
American Water Risk Analysis
American Water disclosed 58 risk factors in its most recent earnings report. American Water reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Water Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $25.70B | 23.45 | 10.14% | 2.51% | 8.10% | 2.89% | |
64 Neutral | $3.24B | 24.27 | 13.06% | 2.64% | 11.68% | 5.79% | |
63 Neutral | $20.18B | 2.77 | 20.63% | 2.22% | 7.58% | 60.87% | |
63 Neutral | $1.05B | 23.40 | 9.07% | 2.67% | 1.76% | -0.20% | |
61 Neutral | $10.87B | 19.59 | 8.16% | 3.48% | 13.07% | -11.65% | |
55 Neutral | $2.91B | 24.62 | 6.96% | 2.88% | 4.20% | -12.47% |
* Utilities Sector Average
AWK
American Water
131.58
-7.32
-5.27%
AWR
American States Water
82.63
6.72
8.86%
WTRG
Essential Utilities
38.31
1.96
5.39%
CWT
California Water Service
48.65
3.45
7.64%
SBS
Companhia De Saneamento
5.78
1.58
37.52%
MSEX
Middlesex Water Company
56.16
1.49
2.73%
American Water Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
American Water reaches partial California rate case settlement
Positive
Jun 9, 2026
On June 8, 2026, California American Water filed a partial settlement in its statewide general rate case with the California Public Utilities Commission’s Public Advocates Office, covering revenue levels for 2027 through 2029 driven by about...
Business Operations and StrategyM&A Transactions
American Water Expands Regulated Footprint with Nexus Acquisition
Positive
Jun 1, 2026
On June 1, 2026, American Water Works Company, Inc. completed a $315 million acquisition of regulated water and wastewater system assets from Nexus Regulated Utilities, LLC in eight states, including Illinois, Indiana, Kentucky, Maryland, New Jers...
Business Operations and StrategyPrivate Placements and Financing
American Water Raises $500 Million Through Senior Notes
Positive
May 20, 2026
On May 18, 2026, American Water Capital Corp., a wholly owned finance subsidiary of American Water Works Company, Inc., agreed to sell $500 million of 4.625% Senior Notes due 2029 underwritten by a syndicate led by major investment banks and suppo...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
American Water Subsidiary Seeks Higher Kentucky Regulated Rates
Neutral
May 15, 2026
At its May 13, 2026 annual meeting, American Water shareholders elected 10 directors for terms running to the 2027 meeting, backed executive pay on an advisory basis, and ratified PricewaterhouseCoopers as 2026 auditor. Investors also approved ame...
Business Operations and StrategyPrivate Placements and Financing
American Water Issues $700 Million Senior Notes for Funding
Positive
Apr 1, 2026
On March 30, 2026, American Water Capital Corp. agreed to sell $700 million of 5.200% Senior Notes due 2036, backed by a long-standing support agreement from American Water Works Company, Inc. The notes, registered under the Securities Act and iss...
Business Operations and StrategyRegulatory Filings and Compliance
American Water Gains Approval for New West Virginia Rates
Positive
Mar 11, 2026
On March 5, 2026, the West Virginia Public Service Commission approved an amended order authorizing new base rates for West Virginia American Water, supporting more than $239 million in water and wastewater system investments made since its last r...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.