Essential Utilities Q2 adjusted EPS beats estimates

Overview

• U.S. water and gas utility's Q2 revenue rose 3% yr/yr

• Adjusted EPS for Q2 beat analyst expectations

• Company raised quarterly dividend 5.25% and affirmed long-term EPS growth guidance

Outlook

• Essential Utilities affirms long-term EPS growth at 5-7% CAGR through 2027 from 2024 adjusted EPS

• Company expects 2026 regulated infrastructure investments to total $1.7 bln

• Essential targets Q1 2027 for merger completion with American Water

Result Drivers

• REGULATORY RECOVERIES - Co said additional revenues from regulatory recoveries and purchased gas costs were main revenue drivers

• WATER SEGMENT GROWTH - Regulated water segment revenue rose 7.6%, driven by regulatory recoveries and increased volume

• NATURAL GAS SEGMENT DECLINE - Natural gas segment revenue fell due to lower volumes from warm weather, partly offset by higher rates and surcharges

Company press release: ID:nBw4xxQcpa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the water related utilities peer group is "buy."

• Wall Street's median 12-month price target for Essential Utilities Inc is $41.50, about 7% above its August 3 closing price of $38.78

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

• Aug 3 - New Jersey Resources beats Q3 adjusted EPS estimates, tightens FY guidance

• Aug 3 - Unitil Q2 net income rises on higher rates, customer growth

• Aug 3 - Avista Q2 adjusted EPS beats estimates on lower fuel costs

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)