AWK - Embedded Expectations Analysis - 2020 03 09
ï€ American Water Works Company, Inc. (AWK:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 45.9x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about water safety regulations, contract growth, and their Pennsylvania wastewater treatment plant acquisitionï€ Specifically, management may be concerned about EPA policies, their ability to ensure water safety, and water quality that does not meet Environmental Working Group standards. In addition, they may lack confidence in their ability to sustain growth in military base contracts and new customer additions in their homeowner services business. Furthermore, they may be concerned about their purchase of a wastewater treatment plant in Exeter, Pennsylvania, and the likelihood of approval of their request to increase rates in California
American Water Works is a holding company. Through its subsidiaries, the company is a publicly-traded water and wastewater utility company. The company provides drinking water, wastewater and other related services to people in various states. The company's Regulated Businesses provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers. The company's Market-Based Businesses provide complementary home services primarily to residential and smaller commercial customers and water and wastewater services to the United States government on military installations, as well as municipalities, utilities and industrial customers.
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