American Water Works Company, Inc. is poised to announce its fiscal Q4 earnings for 2025 on February 18, following the close of trading. Based in Camden, New Jersey, the company provides essential water and wastewater services to various customers, including residential, commercial, and industrial sectors. With a current market capitalization of approximately $25.6 billion, investor attention is focused on the anticipated results.
Analysts predict that American Water Works will report a profit of $1.28 per share, representing an increase of 4.9% compared to $1.22 per share from the same quarter last year. The company has demonstrated a consistent ability to exceed Wall Street’s earnings expectations, having surpassed estimates in three of the last four quarters. In the previous third quarter, American Water Works reported earnings per share (EPS) of $1.94, which was 2.1% above consensus estimates.
As the fiscal year draws to a close in December, analysts forecast that the company will report a profit of $5.74 per share for the entire year, marking a 6.5% increase from $5.39 per share in fiscal 2024. Looking ahead to fiscal 2026, EPS is expected to grow to $6.11, maintaining the same year-over-year growth rate.
Stock Performance and Investor Sentiment
Despite achieving better-than-expected earnings in Q3, American Water Works’ stock experienced a decline of 2.6% in the following trading session. This decline occurred despite the company posting an impressive 9.7% year-over-year increase in operating revenue, which reached $1.5 billion and exceeded consensus estimates by 9.8%. The reported EPS of $1.94 also reflected a 7.8% increase from the previous year.
Investors may have concerns regarding rising operational costs and the company’s leverage. Operating expenses rose by 7.3% compared to last year, reaching $837 million, while total long-term debt increased by 4% to approximately $13 billion. Such financial dynamics have prompted Wall Street analysts to adopt a cautious stance, leading to an overall “Hold” rating for the stock.
Among the fourteen analysts covering American Water Works, three have recommended a “Strong Buy,” ten suggest a “Hold,” and one indicates a “Strong Sell” rating. The consensus price target for the stock stands at $143.09, suggesting a potential upside of 9.2% from its current market levels.
As investors await the upcoming earnings report, the focus will be on how the company addresses cost challenges and what future growth strategies it may unveil. The market’s response will likely hinge on the balance between operational performance and financial management in the face of rising expenses.
