Bank CEOs meet with Trump to discuss Fannie Mae and Freddie Mac - Bloomberg
Investing.com - UBS has reiterated its Neutral rating and $154.00 price target on American Water (NYSE:AWK), currently trading at $140.52, according to analyst notes released Thursday. According to InvestingPro data, the stock is currently trading above its Fair Value, with analyst targets ranging from $117 to $159.
The investment firm highlighted American Water’s active rate case and acquisition activity since mid-May, which supports UBS’s projection of 8% rate base growth and 8% EPS growth for the 2024-2029 period. The company has maintained dividend payments for 18 consecutive years, with an impressive dividend growth of 17% over the last twelve months.
UBS noted that American Water’s largest announced activities include the acquisition of Nexus Water Group assets across eight states and the recent California American water and wastewater rate case filing, which proposes to add $750 million of rate base through completed and planned projects extending to 2028.
The potential rate base additions represent approximately 4.5% of UBS’s 2027 rate base estimate, and the firm calculates that if half of this amount receives regulatory approval and isn’t yet included in current plans, it could add $0.10-$0.15 per share to UBS’s 2027 EPS forecast.
American Water expects its announced acquisitions to close in 2026 with rate cases completing by early 2027, and UBS anticipates the company will provide further updates during its investor call scheduled for July 31.
In other recent news, Pennsylvania American Water has announced multiple acquisitions that will expand its service reach. The company has signed agreements to acquire the Indian Creek Valley Water Authority and the Sutersville-Sewickley Municipal Sewage Authority for a total of $36.05 million, along with a commitment to invest $9.7 million in system improvements. Another significant acquisition involves the City of Pittston’s wastewater collection system for $26.4 million, with plans to invest over $5.1 million in upgrades. These acquisitions are pending approval from the Pennsylvania Public Utility Commission, and the company expects to finalize the deals by 2026.
Additionally, American Water Works Company, the parent company of Pennsylvania American Water, has entered into an agreement to purchase Nexus Utilities’ assets for approximately $315 million, extending its presence across eight states. This transaction is also subject to regulatory approval and is anticipated to be completed by August 2026. In a strategic move, American Water Works has appointed Raffiq Nathoo to its board of directors, enhancing its governance with his extensive financial sector experience.
Analysts at Argus have maintained their Buy rating for American Water Works, citing consistent revenue and earnings growth driven by strategic acquisitions and rate hikes. The firm has set a price target of $155, reflecting confidence in the company’s financial trajectory and its ongoing acquisition strategy. These developments underscore American Water’s commitment to expanding its customer base and enhancing service delivery across its operational footprint.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.