• American Water Works Company, through its Pennsylvania-American Water subsidiary, recently filed a request with the Pennsylvania Public Utility Commission to raise water and wastewater rates in support of about US$1.2 billion in capital investments planned or completed between June 2025 and mid-2027, with proposed new rates potentially taking effect in August 2026.

• An important detail is the inclusion of a pilot program to help low-income renters manage utility costs, reflecting a commitment to both infrastructure modernization and affordability.

• We’ll examine how this major US$1.2 billion infrastructure investment plan and associated rate adjustment request may shape American Water Works’ investment narrative.

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To own shares in American Water Works Company, you need to believe in the long-term value of regulated water infrastructure and the likelihood of successfully recouping ongoing investment through timely and adequate rate approvals. The company’s request to raise Pennsylvania water and wastewater rates stands as a key near-term catalyst, but with regulatory outcomes yet to be determined, the biggest risk, delays or denials in rate relief, remains highly relevant and potentially material to near-term revenue growth.

Among the latest company announcements, the board’s approval of a US$1 billion equity offering is most relevant to the infrastructure investment plan underpinning the current rate filing. Securing these funds could help manage capital needs and support the company’s multi-year growth objectives, but it also ties back to the ongoing catalyst of regulated expansion and the need to keep financing costs from impacting earnings.

On the other hand, investors should also be aware of the risk that if rate relief is delayed or denied in Pennsylvania…

Read the full narrative on American Water Works Company (it’s free!)

American Water Works Company’s narrative projects $6.0 billion revenue and $1.4 billion earnings by 2028. This requires 6.6% yearly revenue growth and an increase of $0.3 billion in earnings from the current $1.1 billion.

Uncover how American Water Works Company’s forecasts yield a $143.78 fair value, a 9% upside to its current price.

Four fair value opinions from the Simply Wall St Community put American Water Works Company’s estimated worth anywhere between US$101 and US$9,999 per share. While these investors take varied views, the pending Pennsylvania rate case highlights how regulatory decisions may directly shape future returns, consider exploring several perspectives before forming your outlook.