It's been a good week for American Water Works Company, Inc. (NYSE:AWK) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.6% to US$129. It was a pretty mixed result, with revenues beating expectations to hit US$1.0b. Statutory earnings fell 3.2% short of analyst forecasts, reaching US$0.95 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for American Water Works Company

Taking into account the latest results, the consensus forecast from American Water Works Company's nine analysts is for revenues of US$4.53b in 2024. This reflects an okay 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.7% to US$5.25. Before this earnings report, the analysts had been forecasting revenues of US$4.43b and earnings per share (EPS) of US$5.25 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of US$137, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on American Water Works Company, with the most bullish analyst valuing it at US$159 and the most bearish at US$123 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that American Water Works Company's rate of growth is expected to accelerate meaningfully, with the forecast 6.9% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that American Water Works Company is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$137, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for American Water Works Company going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with American Water Works Company (including 1 which is potentially serious) .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.