Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
American Water Works (AWK): Accelerated CapEx and EPA Compliance Define the Next Decade- Bridging into Regulatory activity, Earnings Impact , Outlook & its Catalysts !
American Water Works (AWK) delivered a strong Q3 2024, with diluted EPS of $1.80 (+8.4% YoY) and revenue of $1.32 billion exceeding expectations by $94.83 million, reflecting steady operational execution. Management reaffirmed FY24 guidance of $5.25-$5.30 and introduced 2025 EPS guidance of $5.65-$5.75, reflecting 8% growth at the midpoint, supported by a $17-$18 billion five-year capital plan (2025–2029). EPA-mandated Lead and Copper Rule (LCRI) and PFAS compliance investments, totaling $2 billion over five years, position AWK for 8%-9% regulated rate base growth while addressing critical public health needs. M&A activity, including six acquisitions YTD totaling $349 million, bolsters AWK’s long-term growth, with another 1.5 million customer connections in the pipeline. Operational efficiency remains robust, with 75% of investments recovered through adjustment mechanisms, minimizing regulatory lag. However, rising O&M costs, higher depreciation, and $2.5 billion in equity issuance through 2029 present financing headwinds amid higher interest rates. Regulatory risks, as seen in Pennsylvania’s 9.6% allowed ROE, highlight the importance of disciplined cost recovery. While AWK maintains a strong long-term EPS and dividend CAGR target of 7%-9%, near-term valuation upside is tempered by financing dilution and rate case uncertainties. Can AWK sustain its growth trajectory and regulatory balance amid rising costs and macroeconomic pressures?
