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American Water Works (AWK) Stock Jumps 3.6%: Will It Continue to Soar?

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American Water Works (AWK - Free Report) shares ended the last trading session 3.6% higher at $130.77. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.3% gain over the past four weeks.

American Water Works’ 100% net income is generated from regulated operations and AWK’s focus on expanding regulated operations through capital investments is yielding stable returns, which has allowed the company to increase shareholders’ value. Since Jan 1, 2024, the company received approval for $98 million increase in rates.

American Water Works has been investing regularly to upgrade and maintain its water and wastewater infrastructure. The company plans to invest $3.1 billion in 2024 to strengthen and expand its water and wastewater infrastructure and efficiently serve its expanding customer base.  The company continues expand its customer base through organic and inorganic initiatives. Over the long term, the company aims to invest in the range of $16-$17 billion in the 2024-2028 period.

This water utility is expected to post quarterly earnings of $1.49 per share in its upcoming report, which represents a year-over-year change of +3.5%. Revenues are expected to be $1.08 billion, down 1.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For American Water Works, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AWK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

American Water Works belongs to the Zacks Utility - Water Supply industry. Another stock from the same industry, California Water Service Group (CWT - Free Report) , closed the last trading session 2.6% higher at $49.89. Over the past month, CWT has returned -3.6%.

For California Water Service Group, the consensus EPS estimate for the upcoming report has changed -4.9% over the past month to $0.39. This represents a change of +129.4% from what the company reported a year ago. California Water Service Group currently has a Zacks Rank of #1.


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