Overview

• US water utility's Q1 revenue rose yr/yr, supported by new rates and acquisitions

• Adjusted EPS for Q1 declined slightly from prior year

• Company raised quarterly dividend by 8.2%

Outlook

• American Water affirms 2026 adjusted EPS guidance range of $6.02 to $6.12

• Company maintains long-term EPS and dividend growth targets of 7-9%

Result Drivers

• RATE INCREASES AND ACQUISITIONS - Co said higher operating revenues were driven by new rates from completed general rate cases, infrastructure proceedings, and closed acquisitions

• HIGHER OPERATING COSTS - Co said operating expenses rose due to increased production costs, including purchased water, power, and chemicals

• INCREASED DEPRECIATION AND INTEREST - Co said higher depreciation and interest expenses resulted from increased capital investment and additional debt

Company press release: ID:nPn9lcBc9a

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Slight Beat*	$1.21 bln	$1.20 bln (2 Analysts)
Q1 Net Income		$196 mln
Q1 Operating Income	Miss	$391 mln	$440 mln (2 Analysts)
Q1 Operating Expenses		$816 mln
Q1 Pretax Profit		$259 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 10 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the water & related utilities peer group is "buy"

• Wall Street's median 12-month price target for American Water Works Co Inc is $142.00, about 7% above its April 28 closing price of $132.67

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 21 three months ago

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