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Essential Utilities
(NYSE:WTRG)
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Rating:61Neutral
Price Target:
$40.00
â–²(2.56% Upside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by solid regulated-utility profitability and improving revenue trends, tempered by persistently negative free cash flow and moderate leverage that elevate funding risk. Technical indicators point to weak momentum (below major moving averages with negative MACD), while valuation is supportive due to a moderate P/E and attractive dividend yield. Earnings-call commentary is constructive on long-term growth and investment plans, but near-term cost and regulatory headwinds remain key risks.
Positive Factors
Regulated essential-service business model
Essential Utilities’ core regulated model creates durable, predictable cash flows because rates and allowed returns are set by state commissions. Being an essential-service provider across water, wastewater and gas reduces demand variability, supporting long-term revenue stability and planning for multi-year infrastructure work.
Negative Factors
Persistent negative free cash flow
Chronic negative free cash flow means internal funds do not cover capital needs and dividends, forcing ongoing external financing. Over months this raises refinancing and execution risk, increases sensitivity to capital markets conditions, and constrains flexibility if permitting or rate recoveries are delayed.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated essential-service business model
Essential Utilities’ core regulated model creates durable, predictable cash flows because rates and allowed returns are set by state commissions. Being an essential-service provider across water, wastewater and gas reduces demand variability, supporting long-term revenue stability and planning for multi-year infrastructure work.
Read all positive factors
Essential Utilities Key Performance Indicators (KPIs)
Any
Operating Expense Breakdown
Details core costs like maintenance, labor, and infrastructure, offering insight into how efficiently Essential Utilities manages its resources and where it’s prioritizing investment to ensure reliable water and wastewater services.
Details core costs like maintenance, labor, and infrastructure, offering insight into how efficiently Essential Utilities manages its resources and where it’s prioritizing investment to ensure reliable water and wastewater services.
Data provided by:
The Fly
The FlyEssential Utilities (WTRG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.93B
Dividend Yield3.48%
Average Volume (3M)2.06M
Price to Earnings (P/E)19.6
Beta (1Y)-0.21
Revenue Growth13.07%
EPS Growth-11.65%
CountryUS
Employees3,291
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)1.97
Shares Outstanding283,633,000
10 Day Avg. Volume2,315,823
30 Day Avg. Volume2,063,002
Financial Highlights & Ratios
PEG Ratio12.61
Price to Book (P/B)1.57
Price to Sales (P/S)4.34
P/FCF Ratio-25.61
Enterprise Value/Market Cap1.72
Enterprise Value/Revenue7.38
Enterprise Value/Gross Profit15.72
Enterprise Value/Ebitda13.96
Forecast
1Y Price Target
$42.00Price Target Upside7.69% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)2.24
Revenue Forecast (FY)$2.62B
Essential Utilities Business Overview & Revenue Model
Company Description
Essential Utilities, Inc. is a diversified utility enterprise that, through its various operating units, delivers vital water, wastewater, and natural gas services within the United States. Its operations extend beyond direct utility provision, en...
How the Company Makes Money
Essential Utilities primarily makes money by charging customers regulated rates for delivering utility services. Its core revenue streams include: (1) Water service revenue: recurring charges based on metered consumption and/or fixed service fees ...
Essential Utilities Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presented a mix of clear strategic progress and near-term operational and financial headwinds. Positive long‑term developments include strong merger milestones (95% shareholder approval and Kentucky regulatory approval), a sizable acquisition pipeline (~400k customers), active environmental remediation work (PFAS projects) and a reaffirmed 5%–7% EPS growth target. Near-term challenges included a Q1 EPS decline (~23% vs prior Q1) driven by nonrecurring comparisons, merger-related costs (~$16.3M), weather-driven incremental expenses (~$3M) and regulatory uncertainty in Pennsylvania (pending large rate cases and political focus on affordability). Management expressed confidence in meeting full‑year capital and EPS goals, and emphasized operational resilience and continued investment, which suggests the negatives are viewed as temporary and manageable.Positive Updates
Merger Progress and Shareholder Approval
Kentucky Public Service Commission approved the merger and both companies' shareholders previously approved the transaction by 95%; merger still on track to close by end of 2027, creating a combined company serving >4.7M water/wastewater and >740K gas customers.
Negative Updates
Quarterly EPS Decline Versus Prior Year Quarter
Q1 2026 GAAP EPS of $0.79 vs Q1 2025 EPS of $1.03 (a decline of approximately 23% year-over-year). Management attributes much of the gap to nonrecurring favorable items in Q1 2025 and merger-related costs in Q1 2026.
Read all updates
Q1-2026 Updates
Positive
Negative
Merger Progress and Shareholder Approval
Kentucky Public Service Commission approved the merger and both companies' shareholders previously approved the transaction by 95%; merger still on track to close by end of 2027, creating a combined company serving >4.7M water/wastewater and >740K gas customers.
Read all positive updates
Company Guidance
The company reaffirmed its multiyear guidance of 5%–7% annual EPS growth through 2027 using an adjusted 2024 EPS base of $1.97, while targeting a 60%–65% dividend payout ratio and continued balance‑sheet discipline (including a $500 million debt offering earlier in the year and equity opportunistically via an ATM); for 2026 it plans $1.7 billion of regulated infrastructure investment, is on track to complete 106 PFAS projects (five completed YTD, 45 under construction), expects to install at least 80,000 Intellis gas meters (vs. 71,000 last year), and reaffirmed targets to meet full‑year capital and EPS goals (Q1 GAAP EPS was $0.79, adjusted non‑GAAP EPS $0.83 after ~$0.04 of merger costs); acquisition activity includes the $18 million Greenville deal (3,000 customers), signed purchase agreements adding ~201,000 customers for ~$285 million with a larger ~400,000‑customer pipeline, and regulatory progress that has produced $15.1 million of annualized recoveries to date with ~ $102 million pending in water/wastewater cases and a $163.2 million Pennsylvania gas base rate case pending.Essential Utilities Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
63
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.55B | 2.47B | 2.09B | 2.05B | 2.29B | 1.88B |
| Gross Profit | 1.20B | 1.01B | 1.22B | 1.13B | 1.07B | 987.30M |
| EBITDA | 1.35B | 1.37B | 1.25B | 1.06B | 1.01B | 927.66M |
| Net Income | 556.97M | 616.37M | 595.31M | 498.23M | 465.24M | 431.61M |
Balance Sheet | ||||||
| Total Assets | 19.78B | 19.89B | 18.03B | 16.84B | 15.72B | 14.66B |
| Cash, Cash Equivalents and Short-Term Investments | 75.93M | 34.78M | 9.16M | 4.61M | 11.40M | 10.57M |
| Total Debt | 8.44B | 8.34B | 7.73B | 7.09B | 6.84B | 6.02B |
| Total Liabilities | 12.89B | 13.04B | 11.83B | 10.95B | 10.34B | 9.47B |
| Stockholders Equity | 6.89B | 6.86B | 6.20B | 5.90B | 5.38B | 5.18B |
Cash Flow | ||||||
| Free Cash Flow | -507.01M | -419.52M | -559.40M | -265.52M | -462.46M | -375.84M |
| Operating Cash Flow | 976.35M | 1.01B | 770.34M | 933.59M | 600.31M | 644.68M |
| Investing Cash Flow | -1.49B | -1.51B | -1.16B | -1.22B | -1.18B | -1.06B |
| Financing Cash Flow | 569.12M | 525.91M | 397.48M | 281.36M | 578.83M | 417.12M |
Essential Utilities Technical Analysis
Positive
39.00
Price Trends
37.56
Positive
38.60
Negative
38.43
Positive
Market Momentum
0.36
Negative
55.07
Neutral
37.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTRG, the sentiment is Positive. The current price of 39 is above the 20-day moving average (MA) of 37.99, above the 50-day MA of 37.56, and above the 200-day MA of 38.43, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 55.07 is Neutral, neither overbought nor oversold. The STOCH value of 37.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTRG.
Essential Utilities Risk Analysis
Essential Utilities disclosed 35 risk factors in its most recent earnings report. Essential Utilities reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Essential Utilities 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 | $3.29B | 24.59 | 13.06% | 2.64% | 11.68% | 5.79% | |
64 Neutral | $25.49B | 23.14 | 10.14% | 2.51% | 8.10% | 2.89% | |
63 Neutral | $20.69B | 2.90 | 20.63% | 2.22% | 7.58% | 4.69% | |
63 Neutral | $1.02B | 22.64 | 9.07% | 2.67% | 1.76% | -0.20% | |
61 Neutral | $10.93B | 19.58 | 8.16% | 3.48% | 13.07% | -11.65% | |
55 Neutral | $2.94B | 24.83 | 6.96% | 2.88% | 4.20% | -12.47% |
* Utilities Sector Average
WTRG
Essential Utilities
38.58
2.57
7.13%
AWR
American States Water
84.51
10.88
14.78%
AWK
American Water
130.69
-7.95
-5.73%
CWT
California Water Service
49.71
5.09
11.40%
SBS
Companhia De Saneamento
6.06
2.24
58.56%
MSEX
Middlesex Water Company
55.01
1.79
3.36%
Essential Utilities Corporate Events
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Essential Utilities Gains Key Ohio Approval for Merger
Positive
May 15, 2026
On May 14, 2026, American Water Works Company, Inc. and Essential Utilities, Inc. announced that the Public Utilities Commission of Ohio approved their proposed merger, the second key state-level regulatory clearance in less than a month. The comp...
Financial DisclosuresM&A TransactionsRegulatory Filings and Compliance
Essential Utilities Highlights American Water Merger Progress Update
Positive
May 8, 2026
Essential Utilities reported that it entered into a merger agreement on October 26, 2025, under which a wholly owned subsidiary of American Water will merge into Essential Utilities, leaving the company as a wholly owned subsidiary of American Wat...
Executive/Board ChangesShareholder Meetings
Essential Utilities Shareholders Back Board, Pay and Auditor
Positive
Apr 30, 2026
At its April 29, 2026 virtual annual meeting of shareholders, Essential Utilities, Inc. elected all seven director nominees to one-year terms, with each receiving strong majorities of votes cast despite varying levels of withheld votes and a sizab...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Essential Utilities Gains First Approval for American Water Merger
Positive
Apr 22, 2026
On April 22, 2026, American Water Works Company and Essential Utilities announced that the Kentucky Public Service Commission had approved their proposed all‑stock merger, the first regulatory clearance for the deal. This approval follows st...
M&A TransactionsRegulatory Filings and Compliance
Essential Utilities Advances Toward Merger With American Water
Neutral
Mar 25, 2026
On October 26, 2025, Essential Utilities entered into a merger agreement under which a wholly owned subsidiary of American Water will merge with and into the company, leaving Essential Utilities as a wholly owned subsidiary of American Water, subj...
Private Placements and Financing
Essential Utilities Issues $500 Million Senior Notes Offering
Positive
Mar 9, 2026
On March 9, 2026, Essential Utilities, Inc. issued $500 million of 5.125% senior notes due March 15, 2036, under its existing indenture with U.S. Bank Trust Company, National Association, as trustee. The notes pay interest semi-annually beginning ...
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.