Abstract

American Water will release its quarterly results on February 18, 2026 Post Market; this preview consolidates last quarter’s reported performance, the company’s current-quarter projections, and recent institutional commentary to frame the most likely earnings trajectory and stock drivers.

Market Forecast

Consensus indicators suggest American Water’s current quarter revenue is projected at 1.29 billion, with EBIT estimated at 459.46 million and adjusted EPS at 1.25, implying year-over-year growth of 16.07%, 26.91%, and 11.93%, respectively. Based on the latest quarter’s operating mix, the company’s gross profit margin previously ran at 63.96%, and net profit margin at 26.12%; these margins set a high bar for this quarter’s profitability cadence, while the adjusted EPS guide implies continued constructive rate and regulatory pass-through support. The main business remains the regulated water utility operations, which generated 1.34 billion last quarter and continue to be the earnings anchor with stable expansion prospects on the back of capital investment and rate case outcomes. The most promising segment is the regulated operations portfolio itself, with last quarter revenue of 1.34 billion and year-over-year momentum embedded in ongoing infrastructure programs and customer additions; ancillary businesses contributed 108.00 million.

Last Quarter Review

American Water’s last quarter delivered revenue of 1.45 billion, a gross profit margin of 63.96%, GAAP net profit attributable to the parent of 379.00 million, a net profit margin of 26.12%, and adjusted EPS of 1.94, reflecting year-over-year growth of 9.68% for revenue and 9.60% for EPS. A notable highlight was revenue coming in ahead of estimates by 99.67 million, with EPS also modestly exceeding projections, pointing to constructive regulatory outcomes and cost management. The main business highlights include regulated water operations revenue of 1.34 billion, which dominated the mix, and other activities of 108.00 million supporting overall breadth; the core regulated segment remains the principal engine for cash flow and earnings consistency.

Current Quarter Outlook

Main Regulated Water Operations

American Water’s core regulated utility operations are expected to drive the quarter’s results, underpinned by rate mechanisms, infrastructure investment recovery, and demand normalization following seasonal patterns. The projected 1.29 billion in revenue and 1.25 adjusted EPS point to continued growth relative to the prior year, with EBIT forecast to expand at a faster clip than top line, signaling operating leverage and disciplined O&M execution. The margin framework anchored by a prior gross margin of 63.96% and net margin of 26.12% sets a constructive profitability baseline, and incremental capital placed into service should support returns as it rolls into rate base. Customer growth, system reliability upgrades, and timely regulatory filings are likely to sustain mid-single to low-double-digit EPS expansion, while weather variability and cost inflation are monitored as near-term variables.

High-Potential Growth Vector

The most promising earnings vector remains within the regulated footprint where ongoing infrastructure programs and rate case settlements convert into predictable revenue and margin trajectories. Last quarter’s 1.34 billion contribution from the core regulated business showcases its scale and capacity to absorb investment while maintaining efficiency. As new assets enter rate base, EBIT growth of 26.91% year-over-year is anticipated to outpace revenue expansion, suggesting depreciation and interest discipline alongside O&M controls. The ancillary portfolio at 108.00 million provides modest diversification, but the outsized impact on EPS stems from regulatory clarity and execution within the principal operating companies.

Key Stock Price Drivers This Quarter

Investors will focus on the degree to which revenue growth of 16.07% converts into margin preservation, with adjusted EPS guided to rise 11.93%, indicating healthy but measured earnings translation. Any update on rate case progress and allowed ROE/Equity ratio outcomes will shape expectations for multi-quarter cash flow visibility, especially as capital expenditure continues. The quarter’s operating leverage implied by the EBIT forecast emphasizes the importance of cost management and weather normalization; deviations in consumption, unplanned maintenance, or storm impacts could alter the near-term margin path, although historical regulatory mechanisms provide a buffer for prudently incurred costs. Execution across field operations, billing, and customer growth, coupled with active pipeline replacement programs, is likely to be the principal narrative for valuation debates.

Analyst Opinions

Analyst commentary over the recent period trends bullish, with institutions highlighting stable regulatory frameworks, consistent rate base expansion, and operational execution supporting EPS growth. The balance of views skews toward positive expectations for the quarter as EBIT is forecast to rise 26.91% year over year and revenue by 16.07%, indicating operating leverage within the regulated portfolio. Well-followed sell-side voices emphasize the protective qualities of the utility model and the visibility of returns based on capital deployment schedules and settlement cadence, suggesting that the majority expect the company to meet or modestly exceed its EPS guide. This consensus underscores confidence that American Water’s core regulated operations will continue to anchor earnings while incremental efficiency gains and regulatory milestones could provide upside to the current-quarter trajectory.