Upside case
Bull case
$205+62.9%
AWK would need investors to value it at roughly 34x earnings — about 13x more generous than today's 21x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
American Water Works Company, Inc. (AWK) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
29
analysts
13 bullish · 2 bearish · 29 covering AWK
Strong Buy
0
Buy
13
Hold
14
Sell
2
Strong Sell
0
Consensus Target
$135
+6.8% vs today
Scenario Range
$115 – $205
Model bear to bull value window
Coverage
29
Published analyst ratings
Valuation Context
20.7x
Forward P/E · Market cap $24.6B
AWK price targets
Three scenarios for where AWK stock could go
Current
~$126
Confidence
61 / 100
Updated
May 1, 2026
Where we are now
Current · $126
Bear
$115
Base
$142
Bull
$205
Market caseClosest to today
Base case
$142+12.6%
At 23x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$115-8.5%
If investor confidence fades or macro conditions deteriorate, a 2x multiple contraction could push AWK down roughly 9% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
American Water Works Company, Inc.
AWK · NYSEUtilitiesRegulated WaterDecember year-end
American Water Works is the largest publicly traded water and wastewater utility company in the United States, providing essential water services to residential, commercial, and industrial customers. It generates revenue primarily through regulated water rates — about 90% of revenue — with the remainder from military contracts and municipal operations. Its moat comes from natural monopoly characteristics in its service territories, extensive infrastructure investments, and regulatory protection that creates stable, predictable cash flows.
Market Cap
$24.6B
Revenue TTM
$5.2B
Net Income TTM
$1.1B
Net Margin
21.2%
AWK Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
42%Exceptional
12 quarters tracked
Revenue Beat Rate
83%Exceptional
vs consensus estimates
Avg EPS Surprise
+0.9%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 1 of 4Q3 2025
EPS
$1.48/$1.52
Revenue
$1.3B/$1.2B
Q4 2025
EPS
$1.94/$1.88
Revenue
$1.5B/$1.3B
Q1 2026
EPS
$1.24/$1.26
Revenue
$1.3B/$1.3B
Q2 2026
EPS
$1.01/$1.10
Revenue
$1.2B/$1.2B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $1.48/$1.52 | -2.6% | $1.3B/$1.2B | +4.8% |
| Q4 2025 | $1.94/$1.88 | +3.2% | $1.5B/$1.3B | +9.4% |
| Q1 2026 | $1.24/$1.26 | -1.6% | $1.3B/$1.3B | -1.3% |
| Q2 2026 | $1.01/$1.10 | -8.2% | $1.2B/$1.2B | +3.1% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$5.5B
+6.3% YoY
FY2
$6.0B
+8.2% YoY
EPS Outlook
FY1
$6.02
+6.5% YoY
FY2
$6.42
+6.6% YoY
Trailing FCF (TTM)-$1.2B
FCF Margin: -23.1%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
AWK beat EPS estimates in 1 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
AWK Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $4.7B
Product Mix
Latest annual revenue by segment or product family
Regulated Business
100.0%
+9.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
ILLINOIS
42.0%
YoY unavailable
Tap, hover, or focus a slice to inspect segment detail.
Regulated Business is the largest disclosed segment at 100.0% of FY 2025 revenue, up 9.9% YoY.
ILLINOIS is the largest reported region at 42.0%, with no year-over-year comparison yet.
AWK Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Undervalued
Fair value est. $139 — implies +9.2% from today's price.
Upside to Fair Value
9.2%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
AWK
22.1x
vs
S&P 500
25.1x
12% discount
vs Utilities Trailing P/E
AWK
22.1x
vs
Utilities
20.1x
+10% premium
vs AWK 5Y Avg P/E
Today
22.1x
vs
5Y Average
26.8x
17% discount
Forward PE
20.7x
S&P 500
19.1x
+8%
Utilities
17.5x
+18%
5Y Avg
—
—
Trailing PE
22.1x
S&P 500
25.1x
-12%
Utilities
20.1x
+10%
5Y Avg
26.8x
-17%
PEG Ratio
2.80x
S&P 500
1.72x
+63%
Utilities
1.69x
+66%
5Y Avg
—
—
EV/EBITDA
14.6x
S&P 500
15.2x
-4%
Utilities
11.4x
+28%
5Y Avg
18.6x
-21%
Price/FCF
—
S&P 500
21.1x
—
Utilities
15.1x
—
5Y Avg
—
—
Price/Sales
4.8x
S&P 500
3.1x
+53%
Utilities
2.2x
+123%
5Y Avg
6.4x
-26%
Dividend Yield
2.58%
S&P 500
1.87%
+38%
Utilities
3.06%
-16%
5Y Avg
1.98%
+30%
| Metric | AWK | S&P 500 | Utilities | 5Y Avg AWK |
|---|---|---|---|---|
| Forward PE | 20.7x | 19.1x | 17.5x+18% | — |
| Trailing PE | 22.1x | 25.1x-12% | 20.1x+10% | 26.8x-17% |
| PEG Ratio | 2.80x | 1.72x+63% | 1.69x+66% | — |
| EV/EBITDA | 14.6x | 15.2x | 11.4x+28% | 18.6x-21% |
| Price/FCF | — | 21.1x | 15.1x | — |
| Price/Sales | 4.8x | 3.1x+53% | 2.2x+123% | 6.4x-26% |
| Dividend Yield | 2.58% | 1.87% | 3.06% | 1.98% |
AWK trades above S&P 500 benchmarks on 2 of 5 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolAWK Financial Health
Verdict
Exceptional
AWK earns 36.5% operating margin on regulated earnings, 2.6% dividend yield. Utilities carry higher leverage than industrials as a structural feature of the business model.
Regulated Operations
Revenue, regulated margins, and earnings
Revenue (TTM)
Trailing-twelve-month sales base
$5.2B
Revenue Growth
TTM vs prior year
+8.1%
Operating Margin
Operating income divided by revenue
36.5%
Net Margin
Net income divided by revenue
21.2%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$5.65
Operating Margin
Operating income over revenue — primary regulated earnings signal
36.5%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
5.5%
ROA
Return on assets, trailing twelve months
3.1%
Cash & Equivalents
Liquid assets on the balance sheet
$119M
Net Debt
Total debt minus cash
$15.8B
Debt Serviceability
Net debt as a multiple of annual free cash flow
—
Regulated utilities typically operate at 3–5× net debt/FCF — this is structural, not a risk flag.
ROE
Return on equity, trailing twelve months
10.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.6%
Dividend
2.6%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$3.25
Payout Ratio
Share of earnings distributed as dividends
57.0%
Shares Outstanding
Current diluted share count
195M
All figures from the trailing twelve months. Utilities operate with structural leverage (3–5× net debt/FCF) due to regulated, predictable cash flows.
Open full ratios pageAWK Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Debt & Financing
American Water’s debt‑to‑equity ratio stands at 1.18, indicating a heavy leverage load. The company faces the risk of limited access to debt or equity markets at reasonable costs, and several large debt maturities are scheduled in the coming years, potentially straining liquidity.
High Risk
Regulatory Scrutiny & Rate Hikes
AWK operates in regulated markets where rate‑increase approvals are required. Pushback from regulators across multiple jurisdictions can delay or deny rate hikes, directly limiting revenue growth and financial stability.
Medium
Acquisition Approvals
The company’s growth strategy relies on multi‑state acquisitions, notably the proposed merger with Essential Utilities. Delays or rejections of regulatory approvals could prevent cost recovery and the merger may not be accretive to earnings per share, potentially harming the stock price.
Medium
Litigation Risk
AWK faces pending lawsuits related to environmental violations and workplace safety. These legal actions could result in unforeseen liabilities and cash‑flow impacts, increasing operating costs and reputational risk.
Medium
Valuation Concerns
Analysts note that AWK’s price‑to‑earnings ratio is high and its PEG ratio is 3.22, suggesting the stock may be overvalued. Such valuation levels could limit future price appreciation if earnings growth does not keep pace.
Lower
Dividend Coverage
The company’s dividend yield is about 2.41%, but free cash flows do not adequately cover this payout. A weak dividend coverage ratio could force dividend cuts or require additional capital raising.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why AWK Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Infrastructure Gap Drives Demand
Water and wastewater services are essential, creating a stable demand. The U.S. faces a $434 billion infrastructure investment gap by 2029, providing a structural tailwind for AWK’s heavy investment in upgrades and PFAS remediation.
Regulated Model Yields Predictable Growth
AWK’s regulated business model delivers stable cash flows. The company targets 8‑9% growth in its rate base and 7‑9% annual EPS and dividend growth, ensuring consistent earnings expansion.
Merger Creates Scale & Efficiency
The merger with Essential Utilities (WTRG) is expected to enhance scale advantages. It will combine rate bases, expand AWK’s footprint, and unlock operational efficiencies.
Dividend Growth & Strong ROE
AWK has 17‑18 consecutive years of dividend increases and maintains a sustainable payout ratio. Its return on equity stands at 10.38%, underscoring solid financial health.
Dominant Market Position & Barriers
AWK operates in 24 states, serving over 14 million people. High barriers to entry in the utility sector protect its market presence.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
AWK Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$126.05
52W Range Position
16%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$121.28
+3.9% from the low
52-Week High
$150.51
-16.3% from the high
1 Month
-8.60%
3 Month
+0.29%
YTD
-3.3%
1 Year
-14.9%
3Y CAGR
-5.3%
5Y CAGR
-3.8%
10Y CAGR
+5.6%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
AWK vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
20.7x
vs 16.7x median
+24% above peer median
Revenue Growth
+6.3%
vs +6.5% median
-3% below peer median
Net Margin
21.2%
vs 21.1% median
+0% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
AWK AWK American Water Works Company, Inc. | $24.6B | 20.7x | +6.3% | 21.2% | Hold | +6.8% |
WTR WTRG Essential Utilities, Inc. | $10.6B | 16.7x | +6.5% | 24.9% | Buy | +6.7% |
CWT CWT California Water Service Group | $2.6B | 16.7x | +2.0% | 11.8% | Buy | +25.5% |
MSE MSEX Middlesex Water Company | $946M | 19.9x | +4.6% | 22.1% | Buy | +5.0% |
YOR YORW The York Water Company | $465M | 18.0x | +8.4% | — | Hold | — |
ART ARTNA Artesian Resources Corporation | $323M | 15.7x | +7.0% | 20.2% | Buy | — |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
AWK Dividend and Capital Return
AWK returns 2.6% total yield, led by a 2.58% dividend, raised 12 consecutive years.
Dividend SustainableFCF Unknown
Total Shareholder Yield
2.6%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
2.58%
Payout Ratio
57.0%
How AWK Splits Its Return
Div 2.58%
Dividend 2.58%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$3.25
Growth Streak
Consecutive years of dividend increases
12Y
3Y Div CAGR
8.1%
5Y Div CAGR
8.6%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
195M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $1.73 | — | — | — |
| 2025 | $3.25 | +8.2% | 0.0% | 2.5% |
| 2024 | $3.00 | +8.1% | 0.0% | 2.4% |
| 2023 | $2.78 | +8.2% | 0.0% | 2.1% |
| 2022 | $2.57 | +8.9% | 0.0% | 1.7% |
FAQ
7 questionsAWK Investor Questions
Common questions answered from live analyst data and company financials.
01Is American Water Works Company, Inc. (AWK) stock a buy or sell in 2026?
American Water Works Company, Inc. (AWK) is rated Hold by Wall Street analysts as of 2026. Of 29 analysts covering the stock, 13 rate it Buy or Strong Buy, 14 rate it Hold, and 2 rate it Sell or Strong Sell. The consensus 12-month price target is $135, implying +6.8% from the current price of $126. The bear case scenario is $115 and the bull case is $205.
02What is the AWK stock price target for 2026?
The Wall Street consensus price target for AWK is $135 based on 29 analyst estimates. The high-end target is $149 (+18.2% from today), and the low-end target is $124 (-1.6%). The base case model target is $142.
03Is American Water Works Company, Inc. (AWK) stock overvalued in 2026?
AWK trades at 20.7x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals slightly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for American Water Works Company, Inc. (AWK) stock in 2026?
The primary risks for AWK in 2026 are: (1) Debt & Financing — American Water’s debt‑to‑equity ratio stands at 1. (2) Regulatory Scrutiny & Rate Hikes — AWK operates in regulated markets where rate‑increase approvals are required. (3) Acquisition Approvals — The company’s growth strategy relies on multi‑state acquisitions, notably the proposed merger with Essential Utilities. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is American Water Works Company, Inc.'s revenue and earnings forecast?
Analyst consensus estimates AWK will report consensus revenue of $5.5B (+6.3% year-over-year) and EPS of $6.02 (+6.5% year-over-year) for the upcoming fiscal year. The following year, analysts project $6.0B in revenue.
06When does American Water Works Company, Inc. (AWK) report its next earnings?
A confirmed upcoming earnings date for AWK is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does American Water Works Company, Inc. generate?
American Water Works Company, Inc. (AWK) had a free cash outflow of $1.2B in free cash flow over the trailing twelve months — a free cash flow margin of 23.1%. AWK returns capital to shareholders through dividends (2.6% yield) and share repurchases ($0 TTM).