AWK LongUBS analyst Gregg Orrill upgraded American Water (AWK) to a "Buy" rating, raising the price target to $155 from $151. He’s more confident in the company’s future after seeing strong financials and meeting with management. Here are some of the key reasons for the upgrade:
1. Earnings Growth: The company has grown earnings by 7.75% this year and is expected to keep growing at a solid pace, with a projected 8.14% growth next year.
2. Profitability: American Water has a strong profit margin of 21.77%, showing it's good at turning sales into actual profits.
3. Revenue Growth: The company saw a solid 9.24% increase in sales year-over-year, and a strong 13.37% increase in the most recent quarter.
These factors, along with a $1 billion boost to its capital plan, have UBS confident in American Water’s ability to keep growing steadily through 2028.