American Water Works Company, Inc.

LSE:0HEW Stock Report

Market Cap: US$26.9b

American Water Works Company Valuation

Is 0HEW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 0HEW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 0HEW ($138.59) is trading above our estimate of fair value ($104)

Significantly Below Fair Value: 0HEW is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 0HEW?

Key metric: As 0HEW is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 0HEW. This is calculated by dividing 0HEW's market cap by their current earnings.
What is 0HEW's PE Ratio?
PE Ratio27.3x
EarningsUS$983.00m
Market CapUS$26.87b

Price to Earnings Ratio vs Peers

How does 0HEW's PE Ratio compare to its peers?

The above table shows the PE ratio for 0HEW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average35x
SVT Severn Trent
35.7x23.1%UK£8.2b
UU. United Utilities Group
67x24.4%UK£7.6b
SSE SSE
9.9x5.1%UK£18.5b
NG. National Grid
27.3x15.5%UK£47.1b
0HEW American Water Works Company
27.5x7.9%US$26.9b

Price-To-Earnings vs Peers: 0HEW is good value based on its Price-To-Earnings Ratio (27.5x) compared to the peer average (35x).

Price to Earnings Ratio vs Industry

How does 0HEW's PE Ratio compare vs other companies in the Global Water Utilities Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
0HEW 27.3xIndustry Avg. 18.8xNo. of Companies10PE01224364860+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: 0HEW is expensive based on its Price-To-Earnings Ratio (27.5x) compared to the Global Water Utilities industry average (18.8x).

Price to Earnings Ratio vs Fair Ratio

What is 0HEW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

0HEW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.3x
Fair PE Ratio15x

Price-To-Earnings vs Fair Ratio: 0HEW is expensive based on its Price-To-Earnings Ratio (27.5x) compared to the estimated Fair Price-To-Earnings Ratio (15x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 0HEW forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$138.59
US$142.18
+2.6%
8.6%US$164.00US$124.00n/a12
Nov ’25US$137.26
US$143.34
+4.4%
7.9%US$164.00US$124.00n/a12
Oct ’25US$146.42
US$144.58
-1.3%
7.0%US$164.00US$131.00n/a12
Sep ’25US$141.14
US$144.90
+2.7%
7.2%US$164.00US$131.00n/a11
Aug ’25US$144.27
US$140.08
-2.9%
6.2%US$159.00US$126.00n/a11
Jul ’25US$128.83
US$137.18
+6.5%
7.4%US$159.00US$125.00n/a11
Jun ’25US$129.85
US$138.42
+6.6%
8.1%US$159.00US$123.00n/a11
May ’25US$124.88
US$137.06
+9.8%
8.8%US$159.00US$123.00n/a11
Apr ’25US$121.43
US$137.55
+13.3%
8.2%US$159.00US$123.00n/a12
Mar ’25US$119.02
US$139.05
+16.8%
7.4%US$159.00US$127.00n/a12
Feb ’25US$124.97
US$146.51
+17.2%
9.8%US$169.00US$128.00n/a13
Jan ’25US$131.57
US$148.90
+13.2%
10.1%US$169.00US$126.00n/a13
Dec ’24US$133.03
US$148.31
+11.5%
10.1%US$169.00US$126.00n/a13
Nov ’24US$119.18
US$146.62
+23.0%
11.1%US$169.00US$126.00US$137.2613
Oct ’24US$122.83
US$154.82
+26.0%
7.0%US$169.00US$137.00US$146.4211
Sep ’24US$136.58
US$155.73
+14.0%
8.0%US$180.00US$137.00US$141.1411
Aug ’24US$146.20
US$157.09
+7.4%
9.5%US$185.00US$136.00US$144.2711
Jul ’24US$141.52
US$158.27
+11.8%
9.0%US$185.00US$136.00US$128.8311
Jun ’24US$143.16
US$158.64
+10.8%
9.1%US$185.00US$134.00US$129.8511
May ’24US$148.46
US$158.45
+6.7%
9.1%US$185.00US$134.00US$124.8811
Apr ’24US$144.94
US$155.73
+7.4%
10.1%US$185.00US$134.00US$121.4311
Mar ’24US$137.62
US$157.91
+14.7%
10.1%US$185.00US$134.00US$119.0211
Feb ’24US$156.25
US$159.18
+1.9%
10.3%US$185.00US$132.00US$124.9711
Jan ’24US$154.42
US$156.50
+1.3%
11.6%US$186.00US$132.00US$131.5711
Dec ’23US$154.08
US$155.71
+1.1%
11.2%US$186.00US$132.00US$133.0312
Nov ’23US$142.91
US$157.50
+10.2%
11.1%US$186.00US$132.00US$119.1813

Analyst Forecast: Target price is less than 20% higher than the current share price.

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