American Water Works Company, Inc. (AWK) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning and welcome to American Water's first quarter 2021 earnings conference call. As a reminder, this call is being recorded and is also being webcast with an accompanying slide presentation through the company's Investor Relations website. Following the earnings conference call, an audio archive of the call will be available through May 11, 2021. U.S. callers may access the audio archive toll free by dialing 1-877-344-7529. International callers may listen by dialing 1-412-317-0088. The access code for the replay is 10155150. The audio webcast archive will be available for one year on American Water's Investor Relations website at ir.amwater.com/events. Ed Vallejo: Thank you Nick and good morning everyone. And thank you for joining us for today's call. And at the end of our prepared remarks, as usual, we will open the call up for your questions. Now during this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based upon our current expectations, estimates and assumptions. However, since these statements deal with future events, they are subject to numerous known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results indicated or implied by such statements. Additional information regarding these risks, uncertainties and other factors, as well as a more detailed analysis of our financials and other important information is provided in the earnings release and in our May 3, 2021 Form 10-Q, each as filed with the SEC. Reconciliations for non-GAAP financial information related to O&M efficiency ratio and return on equity can be found in our earnings release and in the appendix of the slide deck for this call. Also, this slide deck has been posted to our Investor Relations page of our website. All statements in this call related to earnings and earnings per share refer to diluted earnings and earnings per share. And for purposes of the anchor year on long-term EPS growth guidance, the anchor is weather adjusted 2020 EPS of $3.84. And with that, I will turn the call over to American Water's President and CEO, Walter Lynch. Walter Lynch: Thanks Ed. Good morning everyone and thanks for joining us. Before we move to quarter results, let me speak for a moment about our recent growth news. As you know, a key part of our strategy is to operate in states where we can best serve customers, drive efficiencies and continue to grow our regulated business. Recall that earlier in the year, we announced the sale of our Michigan operation and as you know in late 2019, we announced the sale of our New York operation. This slide shows what our new regulated service territory will look like after the announced transactions are completed. Moving to slide six. We recently announced what will be the largest municipal acquisition in Pennsylvania American Water's history. On April 6, we signed an agreement to acquire the wastewater treatment and collection system for the City of York, Pennsylvania. This agreement will add an equivalent customer connection total of more than 45,000. As part of the agreement, Pennsylvania American Water will also continue to provide contracted wholesale waste water treatment and disposal for seven surrounding communities of York. We look forward to developing strong relationships that meet the needs of all customers, including those outside the city. Susan Hardwick: Thanks Walter. Let's start on slide 13 with a bit more detail on the results. As Walter highlighted, first quarter 2021 earnings were $0.73 per share compared to $0.68 per share in the first quarter 2020. Results for the regulated business segment were $0.74 per share, an increase of $0.06 per share, primarily driven by continued growth from infrastructure investment, acquisition and organic growth. Results for the market-based business were $0.09 per share, a decrease of $0.03 per share as we saw an increase in claims in the homeowner services group, due largely to weather-related events. Parent company results improved $0.02 per share in the first quarter of 2021 as compared to the same period in 2020. Moving on to slide 14. Regulated results increased $0.06 per share. As I said, we saw $0.19 per share increase in revenues from new rates in effect, as well as earnings from acquisitions. O&M expense increased by $0.08 per share and somewhat offsetting was an increase in depreciation of $0.05 per share in support of growth in the business. As previously mentioned, the market-based business results decreased $0.03 per share in the first quarter of 2021 as compared to the first quarter of 2020. The lower results were due to increased claims expense which was driven by extreme cold weather, primarily in Texas and Illinois and the continuation of stay at home activity that we saw throughout most of 2020 due to the pandemic. The parent results improved $0.02 per share in the first quarter of 2021 compared to the first quarter of last year. The improved results were largely driven by a number of small items that increased expenses in the first quarter of 2020, offset by higher interest expense to support growth in the regulated business. Walter Lynch: Thanks Susan. Before we move on to your questions, in April, we were very proud to issue our first annual Inclusion & Diversity Report. This report highlights the efforts we have undertaken and the strides we made advancing our commitment to inclusion and diversity. ESG is a journey and our I&D Report is another way that shows how we are constantly striving thanks for the contributions of every employee to build and inclusive and mutual respect in the workplace. To launch this report internally, we were honored to have Mr. Earvin "Magic" Johnson join us virtually for conversation on inclusion, diversity and on allyship. Additionally, we had an incredible community healing discussion with our employees to provide a chance for even more open and honest dialogue on inclusion. We believe that a company's strength is it's people and the diversity of our workforce makes us even stronger. With that, we are happy to take your questions. Operator: . First question comes from Durgesh Chopra of Evercore ISI. Please go ahead. Durgesh Chopra: Hi. Good morning, Walter and Susan. Susan Hardwick: Good morning Walter Lynch: Good morning Durgesh. Durgesh Chopra: Thanks for taking my question. Good morning. Just, I have couple here. First, Walter, just to clarify, the New York American sale process, I know a lot of moving pieces. But are we still targeting a this year close? Is that the current plan? Walter Lynch: Yes. That's right, Durgesh. We are still working through with, as I said in prepared remarks, still working through with staff and others. And we are hoping to be expecting this year. Durgesh Chopra: Understood. Thank you. And then just on the subpoena. Can I just clarify that this is related to specifically homeowner services within American Water Resources business? And the information that you might be sharing, is that just New York specific or are there are other states involved in the subpoena? Walter Lynch: Yes. It's specific to our New York City Metropolitan operations in HOS. That's exactly right, Durgesh. Durgesh Chopra: Got it. And obviously there is no set time line here as to how this matter gets resolved? Walter Lynch: No, not at this point. Again, we continue to work in cooperating the investigation. Durgesh Chopra: Okay. Understood. Just one big picture then. Walter, just your thoughts on the Biden sort of the American job plan. They talk about several hundred billion of investment on lead and then water and wastewater assets. What are the implications to your existing business? And then just your regulated acquisition growth strategy? Walter Lynch: Yes. Durgesh, let me start with, we are really happy that the administration is focusing on water and wastewater as part of the infrastructure plan. So we like the attention that the industry is getting. And we think that the plan will benefit our customers, primarily by having access to low interest financing that's part of the plan. And so we access it right now on the water side. We want to get access on the wastewater side. That's a growing segment of our business and we want our customers to benefit like others from the low interest loans. So overall, we are very excited about the program and we want to participate like the municipalities do on the wastewater side. Durgesh Chopra: Perfect. And just does it increase your footprint on the regulated acquisition side? Or does it, since there would lot of aid given to systems across the country, does it derail your regulated acquisition growth strategy? How would you sort of characterize that? Walter Lynch: Well, as we have said and I have said in my remarks, there is significant need out there in the water and wastewater side. For us, it's not going to change our plan. Our pipeline continues to grow. We are going to continue to provide meaningful solutions for communities and we are committed to our plan. We don't see any change to our plan going forward. Durgesh Chopra: Understood. Perfect. Thanks guys. Much appreciate the time. Walter Lynch: Thanks Durgesh. Susan Hardwick: Thanks Durgesh. Operator: Thank you. And the next question is from Julien Dumoulin-Smith from Bank of America. Please go ahead. Julien Dumoulin-Smith: Hi. Good morning team. Thanks for the time and opportunity. Maybe to kick things off after Durgesh's question here. Can I follow-up and ask you guys about your latest thinking on the administration just around the PFAS regulation? Hazardous determinations there and just obviously there is a lot of different pieces that could move here. Any, at least preliminary thoughts on where things could go and more specifically how that could impact your business? Walter Lynch: Yes. Julien, thanks for the question. We think there is going to be a lot more focus on PFAS in this administration. I know they formed a task force, I believe it was last week, to look at what are the next steps to establish an MCL. Right now, there is a health advisory limit of 70 parts per trillion and we think that there is going to be a lot more focus on it. So we will have to wait-and-see. But the EPA is really science-driven. They may want to make sure it's based on science. And I think there is going to be a coming together of the science and the need to establish an MCL. And we look forward to participating and working with the administration to establish that. Julien Dumoulin-Smith: Got it. And hazardous determination, that's just part of the broader context here, right? Walter Lynch: That's right. That's all part of this work that's going to be going on. Julien Dumoulin-Smith: Got it. All right. Excellent. And then I suppose a little bit more nuanced here. As you think about the impact here in the quarter on the market-based business here, you are probably still broadly within plan on the year and have some offsets. Just can you speak to that? Obviously, the payouts and the warranties, et cetera, obviously still elevated here? Just if you can speak to that a little bit on the offset, et cetera and how you are tracking? Walter Lynch: Yes. With the HOS business, we are seeing higher claims on the wastewater side. People are spending more time in their homes and that's causing families additional breaks that we are having to repair. And then on the partnership side, we have seen a little bit of a slowdown in those partnerships. Yet, we still have a really good pipeline of opportunities. So those are the two areas, I think, that a been somewhat impacted by the pandemic in our business going forward. Susan Hardwick: Julien. I might just add on that point. In addition to what Walter said, we did see a little bit higher claims in the quarter from these weather-related events. We did see some water claims, particularly in Texas, Illinois and a few of the parts of the country, really driven by the extreme weather that occurred. And we would expect, of course, that to now sort of be over. Some of the wastewater claims that Walter's talking about, as long as we continue this bit more stay at home, we may see elevated claims there. But I think the exposure to the weather-related, we have isolated in this quarter. Julien Dumoulin-Smith: Got it. So how do you think about that relative to full year? Obviously, if the wastewater continues a little bit elevated, just offsets, et cetera? Probably not too material, right? Susan Hardwick: It's really not too material now. And we saw roughly a penny or so of that impact related to the stay at home activity in this quarter. And as you can see across the country, states are starting to loosen up. So there will be some return. So I certainly think we will see this start to mitigate. And in any event, we don't see it as material for the year. Julien Dumoulin-Smith: Excellent, guys. Thank you all very much. Have a nice day. Walter Lynch: Thanks Julien. Susan Hardwick: Thanks Julien. Operator: Thank you. And our next question from Insoo Kim of Goldman Sachs. Please go ahead. Insoo Kim: Thank you. Just a couple for me. The first one, with the recently announced Pennsylvania, New Jersey transactions, how do you think about potential cadence and magnitude of the equity guidance that you gave at the Analyst Day? Just thinking through 2021, 2022, if it's going to be split up? Or are we still assuming kind of, say, April's number is one year? Walter Lynch: Well, first, let me talk about the growth. And we are really excited for these two acquisitions in our two biggest states. It's all part of what we are doing in providing solutions for communities with the City of York on the wastewater side and then Egg Harbor City. In the first WIPA, that's really important, the first WIPA acquisition and we are hopeful many other communities are going to see the benefits of that and continue to sell their systems to New Jersey American Water and Pennsylvania American Water. But it's really about providing meaningful solutions. And again, as we have talked about having consolidated tariffs and the ability to spread those costs across a big customer base, over 700,000 customer connections, really helps those communities to mitigate and minimize customer bill impact. So that's a competitive advantage of ours. It's part of our strategy to make sure that these communities understand the value that we can bring to them through investment and I want the spotlight the follow on investment and how significant that is to our growth and to providing solutions for communities. So we are really excited about these two acquisitions and how they are going to play into future growth in Pennsylvania and New Jersey. Susan Hardwick: Insoo, maybe let me just comment on the equity needs, because that was a follow-on part of your question, I think. When we built our plan and laid out our financing plan over the five years, we anticipated an increase in our growth from acquisition and we reflected that at Analyst Day. Now whether or not we have identified these specific transactions, that's a different question. But we had anticipated a step-up in growth and built our plan accordingly. So long answer to your question, I don't see any change from these specific acquisitions that we have now highlighted, any change to our equity financing timing or any of other our financing plans over the course of the five years. Insoo Kim: Got it. Just from a timing perspective, is there a possibility that we could see some of that equity in the 2021 timeframe? Or is it more beyond 2021? Susan Hardwick: No. It's beyond 2021. At Analyst Day, I think we indicated that there is about $700 million of equity in the five years and it's still roughly in sort in the middle of that five year timeframe. So no, I would not anticipate anything in 2021. Insoo Kim: Got it. And then my second question, I guess maybe for Walter is, obviously these two acquisitions in states that have favorable systems in place for such growth. With the pending New York sale and then the recently announced Michigan divestiture as well, when you just look across your footprint in the different states, you don't have to name any, but are these opportunity to potentially monetize some of the other states to concentrate more on the jurisdictions that offer better systems for organic and inorganic growth? Walter Lynch: Yes. We do a constant assessment of where we are operating, where can we provide the best value for customers and where can we grow our systems. And we will continue to evaluate our footprint. But we are really happy where we are right now and we continue to grow. If you look at our pipeline, we are growing. We have eight states where we have 32 agreements. So it's not just in one or two or three states. It's really across our footprint. And we will continue to provide solutions again for communities across our footprint. Insoo Kim: Understood. Thank you both. Walter Lynch: Thank you. Susan Hardwick: Thanks Insoo. . Operator: Thank you. Next question comes from Steve Fleishman of Wolfe Securities. Please go ahead. Steve Fleishman: Hi. Good morning. Susan Hardwick: Hi Steve. Walter Lynch: Good morning. Steve Fleishman: Hi Walter. So just a question on the disclosure of this subpoena in homeowner services. I guess it doesn't say, I think, in your release just if the company has done its own investigation and if they determined anything was done wrong? Do you have any color or information on that? Walter Lynch: Yes, Steve. And given that it is an ongoing investigation, we really can't comment any more on it other than what we have in the disclosure. Steve Fleishman: Okay. Walter Lynch: All right. Steve Fleishman: And then, Walter, on your year-end call, you had kind of hinted at a larger acquisition or more growth coming in your tuck-in acquisitions and the like? Should I assume that was the York deal the ended up officially getting announced? Or is that still relevant for something else? Walter Lynch: Let me approach from this, we continue to build our pipeline. We continue to, again, provide solutions for communities. And if you look over the last year, we have almost doubled our pipeline. We have the biggest acquisition in Pennsylvania American Water's history. So we are going to keep doing much of the same, Steve. Steve Fleishman: Okay. Great. And then just on the New York American sale. If I understood you correctly, it sounds like neither your forecast nor your equity timing should be impacted at all by whatever happens with the outcome of the sale? Walter Lynch: Yes. That's correct, Steve. Steve Fleishman: Great. That was very clear. Thank you. Walter Lynch: Okay. Steve, thank you. Susan Hardwick: Thank you. Operator: . Next question comes from Richard Sunderland, JPMorgan. Please go ahead. Richard Sunderland: Hi. Good morning. Just maybe following up on that last point real quickly. The sale timing, would it impact where you land within the range of you 2021 guidance? Or phrased differently, you have some timing assumption associated with close presumably baked in/ Can you disclose what that assumption is and what a quarter or two difference may do to where you land link in the range? Susan Hardwick: Hi Rich. It's Susan. I am probably going to add much more detail to that. I would just echo what Walter said in his prepared remarks and in his answer a minute ago. We just don't see it having any impact on 2021. Richard Sunderland: Fair enough. Thank you. And then just separately curious at a high level in terms of your O&M efficiency ratio. What impacts you have seen on your efforts there over the past year under the pandemic and what that may mean for progress and efficiencies going forward as we reopen? Walter Lynch: Yes. It's been a big focus for us, as you know, Rich. And we are going to continue to focus on every area of our business where we can drive efficiencies. We have improved it from 34.5% to 34.1%, as I said in my remarks. And we are confident that we can hit our goal in 2025 of 30.4%. So we are going to continue to do the things that we have been doing, focusing on technology, leveraging our supply chain and really leveraging our culture of looking for every dollar that we can save and continue to provide the service that our customers expect. So that's the journey we are on. We are going to continue to execute on that. And we are confident in our goal in 2025. Richard Sunderland: Great. Thanks for taking my questions. Walter Lynch: Thank you. Susan Hardwick: Thanks Rich. Operator: Thank you. And the next question comes from Verity Mitchell of HSBC. Please go ahead. Verity Mitchell: Hi. Good morning everyone. And I have just got another couple of high level questions about geography, which is something I am always interested in. When I look at your coverage across so many states, does the Biden proposal change the view of your opportunities across states? I mean, you have already said that it's not going to change your growth trajectory. But any nuance there? And also in terms of what we see in terms of major regulatory mechanisms in states now that you would like to see? Thank you. Walter Lynch: Yes. Hello Verity. Walter here. Yes. The administration's proposed plan does not change our outlook at all on acquisitions. Again, we continue to build our pipeline of opportunities. We are providing meaningful solutions and really when you look at the size of our business, how long we have been in business since 1886 and the expertise that we have and the ability to share costs across our customer base, we bring tremendous value to communities and they realize that. And that's why they are talking to us about potentially selling their water and wastewater systems. Verity Mitchell: Yes. So I just want to know whether the states in which you are active, the Biden proposals create new opportunities in particular states? Walter Lynch: I am not sure it will create new opportunities. The great thing is, it really talks about water and wastewater where before we were always left out. And I think is a realization in this country that there is so much fragmentation, so many improvements that need to be made that the private sector and American Water can play a really integral role in moving that forward. And that's what we are excited about. Verity Mitchell: And so what's missing in this? What would you like to see that's missing in terms of fair value or surcharges? What missing there? Walter Lynch: Yes. We continue to work with states on fair market value legislation. As I said, Kentucky is now the 11th state within our footprint to have fair market value legislation. It's really an affirmation of the value that we provide and I think the recognition of the legislatures and the governors that they want us to play a role in consolidating the market and adding our expertise to many of these small system that don't quite have the expertise. So we do have in the appendix an overview of fair market value by state and the specific parts of the fair market value. So refer to that and you can see, again, 11 out of our 16 states have fair market value legislation and we are going to continue to work with states that don't have it and continue to work to tell our story about the values we can provide. Verity Mitchell: Great. Thanks. Walter Lynch: Okay. Thank you Verity. Operator: This concludes our question-and-answer session. Now I would like to turn the conference back over to Mr. Walter Lynch for closing remarks. Please go ahead. Walter Lynch: Thank you for joining our call today. We appreciate and value your participation and the work you do on behalf of your clients. We hope our open and transparent discussions give you confidence in our company and the investment of our stock. As a reminder, our Virtual Annual Shareholders Meeting will be held next week on May 12 at 10:00 AM Eastern Daylight Time. We hope that you will join us. In the meantime, if you have any additional questions, please call the IR team and we will be happy to answer them. Thanks again and be safe. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
American Water Works (NYSE:AWK) Investment Insights
- Gregg Orrill from UBS set a price target of $155 for NYSE:AWK, suggesting a potential upside of 8.94% from its trading price of $142.28 as of November 19, 2024.
- AWK's current stock price is $136.67, reflecting a 1.82% increase with a price change of $2.44.
- The company's market capitalization is approximately $26.64 billion, indicating its substantial size and influence in the utility sector.
American Water Works (NYSE:AWK) is a leading utility company in the United States, providing water and wastewater services to millions of people. The company is known for its commitment to sustainability and efficient resource management. As of November 19, 2024, Gregg Orrill from UBS set a price target of $155 for AWK, suggesting a potential upside of 8.94% from its trading price of $142.28 at that time.
AWK's current stock price is $136.67, reflecting a 1.82% increase with a price change of $2.44. The stock has shown some volatility, with a daily range between $133.18 and $136.89. Over the past year, AWK's price has fluctuated significantly, reaching a high of $150.68 and a low of $113.34. This volatility can present both risks and opportunities for investors.
The company's market capitalization is approximately $26.64 billion, indicating its substantial size and influence in the utility sector. With a trading volume of 1,372,230 shares, AWK is actively traded, reflecting investor interest and liquidity in the market. This level of activity can be beneficial for investors looking to enter or exit positions efficiently.
Calvert Research and Management's evaluation of sustainable companies highlights the importance of ESG factors in investment decisions. While AWK is not specifically mentioned among the top sustainable companies, its commitment to sustainability aligns with the growing trend of ESG-focused investing. This focus on sustainability can enhance AWK's appeal to socially conscious investors.
The potential upside for AWK, as indicated by UBS's price target, combined with its market position and commitment to sustainability, makes it an interesting option for investors. As the market continues to evolve, AWK's performance and adherence to ESG principles may play a crucial role in its future growth and investor appeal.
American Water Works (NYSE:AWK) Investment Insights
- Gregg Orrill from UBS set a price target of $155 for NYSE:AWK, suggesting a potential upside of 8.94% from its trading price of $142.28 as of November 19, 2024.
- AWK's current stock price is $136.67, reflecting a 1.82% increase with a price change of $2.44.
- The company's market capitalization is approximately $26.64 billion, indicating its substantial size and influence in the utility sector.
American Water Works (NYSE:AWK) is a leading utility company in the United States, providing water and wastewater services to millions of people. The company is known for its commitment to sustainability and efficient resource management. As of November 19, 2024, Gregg Orrill from UBS set a price target of $155 for AWK, suggesting a potential upside of 8.94% from its trading price of $142.28 at that time.
AWK's current stock price is $136.67, reflecting a 1.82% increase with a price change of $2.44. The stock has shown some volatility, with a daily range between $133.18 and $136.89. Over the past year, AWK's price has fluctuated significantly, reaching a high of $150.68 and a low of $113.34. This volatility can present both risks and opportunities for investors.
The company's market capitalization is approximately $26.64 billion, indicating its substantial size and influence in the utility sector. With a trading volume of 1,372,230 shares, AWK is actively traded, reflecting investor interest and liquidity in the market. This level of activity can be beneficial for investors looking to enter or exit positions efficiently.
Calvert Research and Management's evaluation of sustainable companies highlights the importance of ESG factors in investment decisions. While AWK is not specifically mentioned among the top sustainable companies, its commitment to sustainability aligns with the growing trend of ESG-focused investing. This focus on sustainability can enhance AWK's appeal to socially conscious investors.
The potential upside for AWK, as indicated by UBS's price target, combined with its market position and commitment to sustainability, makes it an interesting option for investors. As the market continues to evolve, AWK's performance and adherence to ESG principles may play a crucial role in its future growth and investor appeal.
Jefferies Initiates American Water at Underperform, Highlighting Growth Challenges
Jefferies analysts initiated coverage on American Water (NYSE:AWK) with an Underperform rating and set a price target of $124 on the stock. They expressed concerns over AWK’s current valuation premium of over 45% relative to electric utility peers, pointing to potential EPS growth deceleration due to increasing balance sheet pressures and an absence of growth tied to data centers.
The analysts identified several challenges facing American Water, including difficulties in replacing approximately $80 million in interest income after 2026, the company’s reliance on mergers and acquisitions for growth, and rising regulatory risks, particularly following a recent regulatory setback in Pennsylvania.
Jefferies Initiates American Water at Underperform, Highlighting Growth Challenges
Jefferies analysts initiated coverage on American Water (NYSE:AWK) with an Underperform rating and set a price target of $124 on the stock. They expressed concerns over AWK’s current valuation premium of over 45% relative to electric utility peers, pointing to potential EPS growth deceleration due to increasing balance sheet pressures and an absence of growth tied to data centers.
The analysts identified several challenges facing American Water, including difficulties in replacing approximately $80 million in interest income after 2026, the company’s reliance on mergers and acquisitions for growth, and rising regulatory risks, particularly following a recent regulatory setback in Pennsylvania.
UBS Revises American Water Works Company, Inc.'s Outlook to Neutral
- UBS upgrades its price target for American Water Works Company, Inc. (NYSE:AWK) from $124 to $139 and shifts its recommendation to Neutral.
- American Water's dividend offerings are highlighted as a key attraction for income investors, despite a modest price change of -0.13% since the year's start.
- American Water's recent stock performance and solid financial health, with a market capitalization of around $26.4 billion, support UBS's revised outlook.
UBS's recent update on American Water Works Company, Inc. (NYSE:AWK), shifting its recommendation to Neutral and raising its price target from $124 to $139, reflects a nuanced view of the company's prospects. American Water, based in Camden and operating within the Utilities sector, is a significant player in providing water and wastewater services. This adjustment by UBS, as reported by TheFly, suggests a reassessment of American Water's financial performance and future growth potential.
The focus on American Water as a compelling dividend stock, as highlighted by Zacks Investment Research, complements UBS's updated stance. Despite a modest price change of -0.13% since the year's start, American Water's dividend offerings stand out. Dividends are vital for income investors seeking steady cash flow, and American Water's ability to provide this, with dividends sometimes accounting for a significant portion of long-term returns, makes it an attractive investment option.
The stock's recent performance, with a price increase of $1.12 or approximately 0.83%, trading between $134.41 and $135.71, further supports UBS's revised outlook. Over the past year, AWK's price has seen fluctuations between $113.34 and $151.22, indicating a stable yet dynamic market presence. With a market capitalization of around $26.4 billion and a trading volume of 1,763,571 shares, American Water demonstrates solid financial health and investor interest.
UBS's price target adjustment to $139, just above the current trading price, suggests a belief in American Water's steady growth potential without significant overvaluation concerns. This balanced view, considering both the company's dividend attractiveness and its market performance, provides investors with a comprehensive analysis of American Water's investment potential.
American Water Works’ Review Following Q4 Results
American Water Works Company, Inc. (NYSE:AWK) reported its Q4 results, with EPS coming in $3.55, including a $2.75 one-time gain on the sale of the Homeowner Services business. Excluding the sale, EPS was in-line with estimates and was driven by increases in revenues from infrastructure investments and both acquisition-related and organic growth.
Quarterly revenue of $951 million was slightly below the consensus estimates. Management affirmed 2022 EPS expectations in the range of $4.39-$4.49 and its financial targets for 2022-2026, including expectations of 7% to 9% annual EPS growth.
Analysts at DA Davidson believe the company is positioned well to continue growing via acquisitions and modest ROE increases as it executes on its long-term capital investment targets. The analysts reiterated their Neutral rating while decreasing their price target to $164 from $178 to reflect lower valuation multiple expectations.
American Water Works’ Review Following Q4 Results
American Water Works Company, Inc. (NYSE:AWK) reported its Q4 results, with EPS coming in $3.55, including a $2.75 one-time gain on the sale of the Homeowner Services business. Excluding the sale, EPS was in-line with estimates and was driven by increases in revenues from infrastructure investments and both acquisition-related and organic growth.
Quarterly revenue of $951 million was slightly below the consensus estimates. Management affirmed 2022 EPS expectations in the range of $4.39-$4.49 and its financial targets for 2022-2026, including expectations of 7% to 9% annual EPS growth.
Analysts at DA Davidson believe the company is positioned well to continue growing via acquisitions and modest ROE increases as it executes on its long-term capital investment targets. The analysts reiterated their Neutral rating while decreasing their price target to $164 from $178 to reflect lower valuation multiple expectations.
