American Water Works rose about 0.4 percent today, its first gain after three straight down days, and stays within 2 percent of its recent high. We think this is just a quiet day of ordinary trading since there was no major news and the broader market barely moved.
Our view
The business is essentially a machine that turns infrastructure spending into predictable profit growth through regulated rate increases. If you already own it, there is nothing to do here but sit tight and collect the dividend.
Quarterly earnings beat and 2026 outlook confirmed
The company earned $1.61 per share last quarter, which was better than the $1.53 analysts expected. Revenue also came in slightly ahead of targets at $1.35 billion. This growth was fueled by new rates approved by regulators and the addition of about 52,000 new customer connections through acquisitions.
Management confirmed it still expects to earn between $6.02 and $6.12 per share for the full year. The business is on track to spend $3.7 billion this year on things like replacing old pipes and upgrading treatment plants. Because regulators allow the company to earn a set return on these investments, this steady spending is the primary engine that drives higher profits over time.
The company will pay its regular quarterly dividend on September 1 to shareholders who own the stock as of August 11. This consistent payout is a hallmark of the utility's business model, which relies on predictable cash flows from regulated water services.
This acquisition expands the company's footprint in New Jersey and adds about 15,300 new customer connections. It fits the core strategy of buying smaller water systems and then spending money to modernize them. The company plans to invest $25 million into these specific systems, which will eventually allow it to seek higher rates from regulators to cover those costs.
Voluntary water restrictions requested in Virginia
Virginia American Water is asking residents to cut back on water use voluntarily after state officials issued a drought warning. While these requests are common during dry spells, prolonged droughts can sometimes lead to lower water sales or higher costs for sourcing water.
Pennsylvania unit secures $64 million in infrastructure funding
Pennsylvania American Water was awarded over $64 million from a state infrastructure authority. This funding includes low-interest loans, which help the company modernize its systems at a lower cost than traditional borrowing. This ultimately helps keep customer bills lower while still allowing the company to improve its asset base.
Analysts have largely kept their ratings steady following the company's recent earnings report. Half of the 30 analysts rate the stock a buy or neutral, and the average price target of $138 suggests the stock is fairly valued.
Average target$137.50+2%vs $134.82 today
Avg price
Low $130High $150
Hold30 analysts
2Bearish
14Neutral
14Bullish
FirmRatingPrice TargetDate
Truist Financial
Hold
$138→$139
8/4/2026
Barclays
Underweight
$124→$130
7/15/2026
UBS
Buy
$150
7/2/2026
UBS
Buy
$140
5/29/2026
UBS
Buy
$149→$137
5/7/2026
Wells Fargo
Equal Weight
$126→$131
4/21/2026
Barclays
Underweight
$122→$124
4/20/2026
UBS
Buy
$149
12/17/2025
Barclays
Underweight
$134→$122
12/17/2025
Mizuho Securities
Neutral
$145
10/28/2025
Wells Fargo
Equal Weight
$142
10/27/2025
Barclays
Underweight
$128→$134
10/21/2025
American Water Works earnings
The company has a reliable habit of meeting or slightly beating expectations. It is a predictable track record that suggests management has a very firm handle on its regulated costs.
Earnings history
EstimateBeatMiss
American Water Works past earnings results
Expected
Actual
Surprise
EPS
$1.53
$1.61
+5.2%
Revenue
$1.33B
$1.35B
+2.2%
Key highlights
Profit guidance affirmed: Management expects adjusted earnings for the full year of 2026 to be between $6.02 and $6.12 per share. This confirms the company is on track to meet its long-term goal of growing both its earnings and its dividends by 7% to 9% every year.
Rate increases authorized: Regulators have granted the company $216 million in new annualized revenue since the start of the year, including $111 million from settled rate cases. These increases help the company recover the costs of upgrading its pipes and plants and are $127 million higher than the $89 million authorized through April.
Acquisition pace quickening: The company added approximately 52,000 new customer connections through acquisitions in the first half of the year, which is more than the 50,000 it aims to add annually. Growing the customer base through buying smaller water systems is a core part of the business plan to expand its reach and scale.
Infrastructure spending on track: Capital investment reached $1.8 billion for the first six months of 2026, keeping the company on its path to spend $3.7 billion for the full year. This level of spending is essential because the company earns a regulated return on the money it invests in pipes and water treatment facilities.
Operational costs rising: Operating expenses rose by $73 million during the first half of the year, driven by higher costs for purchased water, power, and chemicals used to treat water. While revenue grew faster, these rising production costs eat into the profit margins of the regulated utility business.
Our take: A solid and predictable quarter that shows the company is successfully navigating the regulatory process. The 52,000 new customers added in just six months and the $216 million in new authorized revenue provide a clear path to meeting its full year goals. It reinforces the long term case for a steady, growing dividend.
American Water Works’s next earnings date
Q3 2026
OCT
28
Expectation
EPS
$2.10
Revenue
$1.49B
AUG
11
Dividend payday
Own the stock before this date to get the next dividend payment.
Metrics we are tracking
Metric
Expectations
Status
Capital Investment
Spending $3.7 billion or more annually on infrastructure
$1.8 billion for first six months of 2026
Authorized Revenue Growth
Securing $400 million or more in new annual rates
$216 million authorized through June 2026
Customer Count
Adding 50,000 or more customers through acquisitions annually
52,000 added through June 30, 2026
Interest Coverage Ratio
Keeping EBIT at 3x interest expense or higher
2.8x for Q2 2026
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