American States Water Company Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
As you might know, American States Water Company (NYSE:AWR) just kicked off its latest annual results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 2.2% to hit US$474m. American States Water reported statutory earnings per share (EPS) US$2.28, which was a notable 12% above what analysts had forecast. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for American States Water
Following last week's earnings report, American States Water's three analysts are forecasting 2020 revenues to be US$472.6m, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 9.2% to US$2.08 in the same period. Before this earnings report, analysts had been forecasting revenues of US$472.6m and earnings per share (EPS) of US$2.12 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$83.00, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic American States Water analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$57.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Further, we can compare these estimates to past performance, and see how American States Water forecasts compare to the wider market's forecast performance. Over the past five years, revenues have declined around 0.3% annually. On the bright side, analysts expect the decline to level off somewhat, with the forecast for a 0.3% decline in revenue next year. Compare this against analyst estimates for companies in the wider market, which suggest that revenues (in aggregate) are expected to decline 14% next year. So it's pretty clear that, while it does have declining revenues, at least analysts expect American States Water to suffer less severely than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that American States Water's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for American States Water going out to 2021, and you can see them free on our platform here.
We also provide an overview of the American States Water Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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