A Look At American Water Works (AWK) Valuation As Steady Returns Meet Richer P/E Multiples

Simply Wall St.02-25 09:26

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Returns Meet Richer P/E Multiples\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-25 09:26 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/utilities/nyse-awk/american-water-works/news/a-look-at-american-water-works-awk-valuation-as-steady-retur><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>AdvertisementWhy American Water Works Company Is On Investor Radars Today American Water Works Company (AWK) is drawing fresh attention as investors weigh its recent share performance alongside ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/utilities/nyse-awk/american-water-works/news/a-look-at-american-water-works-awk-valuation-as-steady-retur\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2125910336.SGD","symbol_name":"Natixis Thematics Water R/A 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US$5.14b and net income of US$1.11b.\nSee our latest analysis for American Water Works Company.\nThe recent 1 month share price return of 3.37% and 90 day share price return of 3.26% suggest a gentle pickup in momentum around American Water Works Company, while the 1...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2125910336.SGD":"Natixis Thematics Water R/A SGD","LU2089279066.USD":"ALLIANZ GLOBAL WATER \"AT\" (USD) ACC","LU1620156130.USD":"BNP PARIBAS AQUA \"C\" (USD) ACC","LU2506952337.HKD":"BNP PARIBAS CLIMATE IMPACT \"CRH\" (HKDHDG) ACC","LU1721428347.USD":"BNP PARIBAS CLIMATE IMPACT \"C\" (USD) ACC","LU1923621640.USD":"Natixis Thematics Water R/A USD","AWK":"美国水务","IE00BD4GTV84.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) ACC","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","LU2477742899.HKD":"BNP PARIBAS CLIMATE IMPACT \"C\" (HKD) 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See our latest analysis for American Water Works Company. The recent 1 month share price return of 3.37% and 90 day share price return of 3.26% suggest a gentle pickup in momentum around American Water Works Company, while the 1 year total shareholder return of 0.15% points to relatively muted long term gains so far. If this steady move in a regulated utility has you thinking about where growth might come from next, it could be worth scanning 24 power grid technology and infrastructure stocks as a starting list of related infrastructure names to research further. So with American Water Works trading at US$134.08, sitting close to analyst price targets and an internal estimate that suggests a premium, should you see hidden value here or assume the market is already pricing in future growth? Most Popular Narrative: 3.1% Undervalued With American Water Works Company last closing at $134.08 against a most followed fair value estimate of $138.40, the current setup hinges on how investors view future earnings and regulated returns rather than short term price swings.  Heightened regulatory and societal focus on water quality and infrastructure modernization is accelerating rate case approvals and driving significant capital investment (e.g., $3.3 billion capital spend in 2025, requests for $111 million cumulative rate increases in CA by 2029). These factors enable predictable, above inflation rate increases and support sustainable earnings expansion.  Read the complete narrative. Curious how steady customer growth, rising capital spend and firmer margins are all stitched together into that fair value number? The revenue path, margin assumptions and future earnings multiple are doing more of the heavy lifting here than you might expect. The full narrative lays out how those moving parts connect, and which expectations have the most impact on where analysts think the stock should trade. Result: Fair Value of $138.40 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to watch for rising operating and financing costs, as well as the risk that key rate cases take longer or arrive smaller than expected. Find out about the key risks to this American Water Works Company narrative. Another Angle On Valuation Those fair value models point to a 3.1% undervaluation, but the current P/E of 23.6x tells a different story. It sits above both the estimated fair ratio of 22.8x and peer averages of 19.3x in the US and 16.9x globally, which leans toward richer pricing. So is this a quality premium or just paying up? See what the numbers say about this price — find out in our valuation breakdown. NYSE:AWK P/E Ratio as at Feb 2026Next Steps If this combination of signals seems unclear to you, consider acting while the details are fresh and weigh the trade off yourself using 2 key rewards and 2 important warning signs. Looking for more investment ideas? Before you move on, this is the moment to line up a few fresh watchlist candidates from our screeners instead of stopping at a single stock.  Target potential value opportunities by checking out our 51 high quality undervalued stocks, which pairs quality fundamentals with pricing that may warrant a closer look. Protect your downside first and build a shortlist from our 78 resilient stocks with low risk scores, which focuses on companies with more resilient risk profiles. Spot tomorrow's standouts early by scanning the screener containing 23 high quality undiscovered gems, which highlights lesser known names with solid underlying metrics.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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