H2O America Q2 adjusted EPS beats estimates 

Overview

• U.S. water utility's Q2 revenue rose 6% year-over-year, driven by rate increases

• Adjusted EPS for Q2 beat analyst expectations, despite a slight year-over-year decline

• Company reiterates 2026 adjusted EPS guidance and reports progress on Quadvest acquisition

Outlook

• H2O America reaffirms 2026 standalone adjusted diluted EPS guidance of $3.08-$3.18

• Company maintains long-term adjusted diluted EPS CAGR target of 6-8%, anchored off 2025 EPS

• Company plans $483 mln in capital investment for 2026, $2.7 bln over 2026-30 period

Result Drivers

• RATE INCREASES - Revenue growth was primarily driven by rate increases, especially in California and Connecticut

• HIGHER OPERATING EXPENSES - Operating expenses rose due to increased water production costs, higher depreciation from utility plant additions, and greater general and administrative expenses, including merger and acquisition costs

• HIGHER SHARE COUNT - Adjusted EPS declined slightly as higher net income was more than offset by a larger share count from equity issuances

Company press release: ID:nGNX1z3mc

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "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 H2O America(Dover) is $66.50, about 4.2% above its July 24 closing price of $63.84

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 20 three months ago

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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.)