American Water Works Company, Inc. Just Recorded A 6.8% Revenue Beat: Here's What Analysts Think

It's been a good week for American Water Works Company, Inc. (NYSE:AWK) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.2% to US$147. It was a workmanlike result, with revenues of US$1.1b coming in 6.8% ahead of expectations, and statutory earnings per share of US$1.05, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from American Water Works Company's eleven analysts is for revenues of US$4.92b in 2025. This reflects a credible 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.1% to US$5.72. Before this earnings report, the analysts had been forecasting revenues of US$4.95b and earnings per share (EPS) of US$5.71 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for American Water Works Company

There were no changes to revenue or earnings estimates or the price target of US$142, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values American Water Works Company at US$160 per share, while the most bearish prices it at US$122. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that American Water Works Company's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.0% growth on an annualised basis. This is compared to a historical growth rate of 4.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that American Water Works Company is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$142, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on American Water Works Company. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for American Water Works Company going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for American Water Works Company (of which 1 is concerning!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.