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Essential Utilities
(NYSE:WTRG)
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Rating:66Neutral
Price Target:
$43.00
â–²(8.56% Upside)
Action:Reiterated
Date:08/06/26
WTRG’s score is led by constructive earnings-call fundamentals (reaffirmed 5%–7% EPS growth outlook, strong capital plan, and rate-case progress) and a mildly positive technical setup (price above key moving averages with neutral momentum). The biggest offset is financial quality of cash generation—free cash flow remains consistently negative—along with a valuation that looks reasonable but not clearly discounted for the funding and regulatory risks.
Positive Factors
Regulated utility model
Essential operates regulated water, wastewater and gas networks with state-approved rate mechanisms. That model yields durable, recurring revenue, predictability in cash flows and allowed returns on invested capital, supporting steady earnings and funding for infrastructure over the medium term.
Negative Factors
Consistent negative free cash flow
Despite improving operating cash flow, persistent negative free cash flow means capex and investing needs exceed internal generation. This increases reliance on external financing, constrains balance-sheet flexibility, and elevates execution risk during large integration or rate-timing delays.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated utility model
Essential operates regulated water, wastewater and gas networks with state-approved rate mechanisms. That model yields durable, recurring revenue, predictability in cash flows and allowed returns on invested capital, supporting steady earnings and funding for infrastructure over the medium term.
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
$11.48B
Dividend Yield3.44%
Average Volume (3M)2.12M
Price to Earnings (P/E)20.6
Beta (1Y)-0.22
Revenue Growth9.86%
EPS Growth-16.27%
CountryUS
Employees3,303
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)1.96
Shares Outstanding283,778,600
10 Day Avg. Volume1,988,222
30 Day Avg. Volume2,120,661
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$43.00Price Target Upside8.56% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)2.24
Revenue Forecast (FY)$2.57B
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 makes money primarily by operating regulated utility businesses that earn revenue by charging customers for water, wastewater, and natural gas distribution service under rates approved by state public utility commissions. Its c...
Essential Utilities Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call presented a generally positive operational and strategic picture: merger integration is progressing, capital investment is strong with a record-year plan, rate case progress is delivering material annualized revenue, acquisitions and a sizable BD pipeline are in place, and the dividend was increased. Offsetting these positives are modest near-term earnings pressure (GAAP EPS down $0.01 year-over-year), O&M increases driven by labor and medical costs, higher depreciation/interest reducing EPS, regulatory scrutiny in Pennsylvania and some transactional timing risks (DELCORA). On balance the company reaffirmed its 5%–7% EPS growth target and highlighted constructive regulatory and integration progress, leading to a net constructive tone.Positive Updates
Merger Progress and Integration
Received regulatory approvals in Kentucky, Ohio and Virginia; settlement in principle in Texas; New Jersey public hearings scheduled for August; Illinois process on statutory timeline finishing by November; negotiations and evidentiary hearings ongoing in Pennsylvania. Integration work between Essential and American Water is progressing well with strong collaboration; management continues to expect merger close in Q1 2027.
Negative Updates
Slight Year-Over-Year EPS Pressure
GAAP EPS decreased from $0.38 in Q2 2025 to $0.37 in Q2 2026 (a $0.01 decline, roughly -2.6%). Non-GAAP EPS of $0.38 was effectively flat year-over-year after adjusting for merger-related costs.
Read all updates
Q2-2026 Updates
Positive
Negative
Merger Progress and Integration
Received regulatory approvals in Kentucky, Ohio and Virginia; settlement in principle in Texas; New Jersey public hearings scheduled for August; Illinois process on statutory timeline finishing by November; negotiations and evidentiary hearings ongoing in Pennsylvania. Integration work between Essential and American Water is progressing well with strong collaboration; management continues to expect merger close in Q1 2027.
Read all positive updates
Company Guidance
Essential reaffirmed its 5%–7% annual normalized EPS growth guidance through 2027 (anchored to non‑GAAP 2024 EPS of $1.97) and said it is confident it will meet the 2026 target; Q2 GAAP EPS was $0.37 (non‑GAAP $0.38, including ~$0.01 of merger costs). The company has invested $662 million year‑to‑date and is on track to invest a record $1.7 billion in 2026, with roughly 55% of Pennsylvania capital DSIC‑eligible. Regulatory outcomes finalized to date total $56.6 million of annualized revenue (≈78% water/wastewater), with pending water/wastewater requests of ~$79.7 million and a Pennsylvania gas base rate filing of $163.2 million; the merger is expected to close in Q1 2027. Essential increased its quarterly cash dividend by 5.25% (payable Sept. 1, 2026; record Aug. 11) and targets a payout ratio of 60%–65%; the effective tax rate is expected to be low single digits (under ~5%). Acquisitions add about 200,000 customers for ~ $282 million in purchase price (including DELCORA), recent Integra deal was $4.9 million for ~1,100 customers, and the BD pipeline totals ~400,000 customers; management also noted a one‑time S‑4 item expected later this year that would be accretive.Essential Utilities Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.57B | 2.47B | 2.09B | 2.05B | 2.29B | 1.88B |
| Gross Profit | 1.37B | 1.01B | 1.22B | 1.13B | 1.07B | 987.30M |
| EBITDA | 1.36B | 1.37B | 1.25B | 1.06B | 1.01B | 927.66M |
| Net Income | 554.87M | 616.37M | 595.31M | 498.23M | 465.24M | 431.61M |
Balance Sheet | ||||||
| Total Assets | 19.94B | 19.89B | 18.03B | 16.84B | 15.72B | 14.66B |
| Cash, Cash Equivalents and Short-Term Investments | 8.63M | 34.78M | 9.16M | 4.61M | 11.40M | 10.57M |
| Total Debt | 8.52B | 8.34B | 7.73B | 7.09B | 6.84B | 6.02B |
| Total Liabilities | 12.92B | 13.04B | 11.83B | 10.95B | 10.34B | 9.47B |
| Stockholders Equity | 7.02B | 6.86B | 6.20B | 5.90B | 5.38B | 5.18B |
Cash Flow | ||||||
| Free Cash Flow | -488.38M | -419.52M | -559.40M | -265.52M | -462.46M | -375.84M |
| Operating Cash Flow | 1.03B | 1.01B | 770.34M | 933.59M | 600.31M | 644.68M |
| Investing Cash Flow | -1.54B | -1.51B | -1.16B | -1.22B | -1.18B | -1.06B |
| Financing Cash Flow | 499.84M | 525.91M | 397.48M | 281.36M | 578.83M | 417.12M |
Essential Utilities Technical Analysis
Positive
39.61
Price Trends
38.33
Positive
38.24
Positive
38.16
Positive
Market Momentum
0.44
Negative
61.71
Neutral
73.12
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 39.61 is above the 20-day moving average (MA) of 39.48, above the 50-day MA of 38.33, and above the 200-day MA of 38.16, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 61.71 is Neutral, neither overbought nor oversold. The STOCH value of 73.12 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $3.52B | 24.31 | 13.50% | 2.33% | 13.23% | 12.00% | |
67 Neutral | $27.12B | 23.56 | 10.15% | 2.51% | 6.92% | 4.00% | |
66 Neutral | $11.48B | 20.60 | 8.05% | 3.46% | 9.86% | -16.27% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $3.10B | 22.63 | 7.62% | 2.50% | 6.43% | -2.99% | |
65 Neutral | $1.11B | 22.50 | 9.57% | 2.53% | 5.26% | 7.26% | |
63 Neutral | $16.39B | 2.22 | 20.63% | 2.37% | 9.43% | 35.24% |
* Utilities Sector Average
WTRG
Essential Utilities
40.38
2.59
6.86%
AWR
American States Water
88.97
15.54
21.16%
AWK
American Water
136.20
-3.90
-2.78%
CWT
California Water Service
50.40
5.19
11.49%
SBS
Companhia De Saneamento
4.60
0.49
12.03%
MSEX
Middlesex Water Company
58.73
6.82
13.13%
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...
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.