The Pattern in American Water Works Company, Inc. (AWK) That Triggers Right After Earnings

9 days have passed by since the last earnings report for American Water Works Company, Inc. (NYSE:AWK) and the new quarterly results look set to arrive in 109 days. The shares of AWK at the moment are trading at a volume of 1.33 million, which compares with its normal daily standard volume of 992.02 million shares. This has led to the shares of the company declining by -2.83%, currently exchanging hands at $118.15 a share. AWK stock has been up by $11.74 (-9.04%) ever since it reached its 52-week high of $129.89 back in September 04, 2019. It has progressed below its 50-day moving average of $122.72 and is down -4.15% over the past week. The stock has added 0.5% since the last one arrived so the question here is that will the upbeat trend in that time frame continue leading up to its next earnings release, or is the AWK share price due for a correction?

American Water Works Company, Inc. (AWK) Forecasts And Latest Quarter Earnings

Ahead of their fiscal fourth-quarter to be released on Tuesday, Feb 25, 2020, 7 analysts who are covering the company are estimating that it will record a profit of $0.74 per share, with analysts having different outlooks from $0.71 to $0.77. The current agreed outlook, when compared to the profit recorded last year, is at $0.69 a share, thus an increase of 7.25% is expected. The profit view for a complete financial year for American Water Works Company, Inc. is expected to be around $3.61 in current year, a decline of nearly 9.39% from last year which was $3.3.

Let’s now look at their sales section, AWK’s revenue is estimated to be $850M, a figure which is more than the $850M recorded for Q4 last year. Their sequential sales though are expected to move versus Q3’s $882B. Their full-year outlook is pegged at $3.63B, implying that there would be an increase of 5.52% over the $3.44B they recorded last year in revenue. American Water Works Company, Inc. is projected to get sales lifted by 5.23% in the next quarter, with a revenue target of $3.82B.

Analyzing The Earnings History Of American Water Works Company, Inc. (NYSE:AWK)

In the past few years, the AWK stock has been known to miss the Wall Street’s earnings projection. The company missed 16% of the time, according to the data pulled on their earnings, was able to meet predictions on 4 occasions and topped expectations 6 times. Looking at the past trend, the price of American Water Works Company, Inc. shares had sank following the release of their earnings in 19 of the last 38 quarters.

Looking back, here is how American Water Works Company, Inc. (AWK) stock reacted to earnings misses and beats. It gave investors reason to cast doubts with the price going down after 2 of the last four earnings reports. The shares of American Water Works Company, Inc. recorded 1.9%, 1.95%, -0.39% and -0.04%, respectively, on the first day of past earnings releases. After a week of earnings reports, the changes were 0.51%, 3.2%, -1.16% and 2.37%. Their post-earnings price movements have resulted in an average increase of 0.86% and an average increase of 1.23% in American Water Works Company, Inc. on next day and 7th day, sequentially. AWK’s one month stock performance led to its shares declining by -5.38% with a return of 32.6% witnessed over the last 52 weeks.

The lower number of analysts has assigned a buy or better ratings (4) on the American Water Works Company, Inc. stock, while 5 of them have a rating of a Hold with the 11-year target price suggested by the analysts standing at $126.64. This price target implies potential upside of 7.19 percent over the next 12 months based on the current share price.

American Water Works Company, Inc. (AWK) Post Earnings Announcement Drift (PEAD)

Back on October 30, 2019, American Water Works Company, Inc. (NYSE:AWK) released its Q3 results, in which it recorded EPS of $1.33 that exceeded consensus estimates of $1.3. After the earnings were reported, the price of AWK stock kicked off the session at $121.24 and remained in a range of $122.38 to $123.49 on the first day. The shares were priced at $123.27 at the close with a total volume of shares being 1264811.

On July 31, 2019, the Q2 earnings report was disclosed with EPS of $0.94. This was above the estimation of $0.93 per share. The stock price range of AWK was between $113.63 and $117.61 on the first-day post announcement, after opening the day at $113.2. The session came to close at $117.02 and there was a total volume of 1667008 shares.

May 01, 2019 was the day when its Q1 results were unveiled. The earnings came in at $0.61, missing the projected $0.63 per share. The very next day, AWK stock opened at $105.26 while staying in a range of $106.66 to $107.07. At the end, it moved to $106.68 a total volume of shares been 950888.

In the year-ago Q4 earnings on February 19, 2019, the company saw profit per share of $0.69. That was equal to the $0.69 analysts had expected. American Water Works Company, Inc. share price started at $96.64 on the first full trading day post-earning and then exchanged hands between $97.73 and $98.98 throughout the session. The closing price of $98.66 came on the back of 1831745 shares in volume.