American Water Q2 revenue beats estimates helped by rate increases, acquisitions

Overview

• U.S. water utility's Q2 revenue rose and beat analyst expectations

• Adjusted EPS for Q2 increased yr/yr

• Company affirmed 2026 adjusted EPS guidance and long-term financial targets

Outlook

• American Water affirms 2026 adj EPS guidance range of $6.02 to $6.12

• Company maintains long-term EPS and dividend growth targets of 7-9%

• American Water says 2026 capital investment plan of $3.7 bln is on track

Result Drivers

• RATE INCREASES AND ACQUISITIONS - Revenue growth was primarily driven by new rates from completed general rate cases, infrastructure surcharges, and incremental revenue from closed acquisitions

• HIGHER OPERATING COSTS - Increased production costs, purchased water, power, and chemicals, as well as higher depreciation and interest expenses, partially offset revenue gains

• CUSTOMER GROWTH FROM ACQUISITIONS - Approximately 52,000 customer connections were added through acquisitions, including the Nexus Water systems

Company press release: ID:nPn7pRn8ya

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 10 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the water related utilities peer group is "buy"

• Wall Street's median 12-month price target for American Water Works Co Inc is $135.15, about 2.1% below its July 28 closing price of $138.04

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 22 three months ago

Reuters Recommended Reads

• July 28 - Zurn Elkay Water Q2 sales beat estimates

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• July 27 - H2O America Q2 adjusted EPS beats estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)