With a market cap of $25.2 billion, American Water Works Company, Inc. (AWK) is a leading provider of water and wastewater services across the United States. Serving approximately 3.5 million customers in 14 states, the Camden, New Jersey-based company operates a vast network of infrastructure, including treatment plants, pipelines, wells, and pumping stations.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and American Water Works fits this criterion perfectly. Through its Regulated Businesses segment, it delivers essential services to residential, commercial, industrial, and public sector customers. American Water Works plays a crucial role in managing and maintaining vital water and wastewater systems for diverse communities.
The water utility company has seen a 15.8% decline from its 52-week high of $150.68, reached on Sep. 17. Over the past three months, its shares have dipped 14.8%, underperforming the broader Dow Jones Industrials Average's ($DOWI) 5.1% gain during the same period.
Longer term, AWK is down 3.9% on a YTD basis, lagging behind DOWI's 15.8% return. In addition, shares of American Water Works have declined 3.1% over the past 52 weeks, compared to the Dow Jones’ nearly 17% rise over the same time frame.
AWK has shown a bearish trend, trading below its 50-day moving average since October. Recently, the stock also dropped below its 200-day moving average
Despite reporting weaker-than-expected Q3 EPS of $1.80 on Oct. 30, shares of AWK rose 1.8% the following day due to robust revenue performance and encouraging future projections. The 13.4% year-over-year revenue growth to $1.3 billion exceeded estimates by 9.8%, reflecting successful rate increases and customer additions. Furthermore, the company reiterated its 2024 EPS guidance of $5.25 - $5.30, issued a strong 2025 EPS guidance of $5.65 - $5.75, and announced ambitious long-term capital investments of $40 billion - $42 billion through 2034, bolstering investor confidence.
However, AWK has underperformed its rival, Essential Utilities, Inc. (WTRG), which has experienced a slight decline YTD and a 3.1% gain over the past 52 weeks.
Analysts are cautious about AWK's prospects, given its underperformance compared to broader markets over the past year. With a consensus "Hold" rating from 15 analysts, the mean price target of $144.33 indicates a 13.8% premium to current levels.
