Based in Camden, New Jersey, American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States. Valued at a market cap of $27.7 billion, the company operates a variety of water and wastewater infrastructure and has regulated operations in 14 states and on 18 military installations. The regulated water company is expected to announce its fiscal Q3 earnings results after the market closes on Wednesday, Oct. 30. 

Ahead of this event, analysts expect AWK to report a profit of $1.84 per share, up 10.8% from $1.66 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in two of the last four quarters while missing on other two occasions. In Q2, the company’s EPS of $1.42 missed the consensus estimates by 3.4% and declined 1.4% from a year ago. This was primarily due to the adverse impact of unfavorable weather in 2024 coupled with an increase in operating and maintenance expenses.

For fiscal 2024, analysts expect AWK to report an EPS of $5.27, up nearly 7.6% from $4.90 in fiscal 2023. Moreover, EPS is expected to increase almost 8% year-over-year to $5.69 in fiscal 2025.

Shares of AWK have gained 6.9% on a YTD basis, lagging behind both the S&P 500 Index's ($SPX) 22.7% rise and the Utilities Select Sector SPDR Fund’s (XLU) 28.9% return over the same period.

Despite missing Wall Street’s earnings estimates, shares of AWK jumped 1.5% after its Q2 earnings release as its revenue of $1.15 billion surpassed the consensus estimates of $1.07 billion and climbed 4.7% from a year ago. The improvement in revenues can be attributed to a 5.2% year-over-year growth in revenues from regulated businesses. The company’s completion of five acquisitions in the quarter, which added 33,400 new customers to its existing customer base, might have further bolstered investor confidence. 

However, analysts' consensus view on American Water Works’ stock is cautious, with a "Hold" rating overall. Among 15 analysts covering the stock, three recommend "Strong Buy," one suggest "Moderate Buy," eight indicate “Hold,” two suggest “Moderate Sell,” and one recommend “Strong Sell.” This configuration is less bullish than three months ago, when not a single analyst suggested a "Strong Sell." 

The average analyst price target for AWK is $143.17, indicating a slight 1.5% potential upside from the current levels. 

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