American Water Works (AWK) has disclosed a new risk, in the Debt & Financing category.
American Water Works Company, Inc. (AWCC) faces a substantial financial risk due to the conditional exchange feature of its Exchangeable Senior Notes due in 2026. Should the feature be activated, AWCC may have to disburse a significant cash settlement, which could strain its liquidity and negatively impact its financial standing. Moreover, the potential dilution of existing shareholders’ interests or the alternative of increased stock market volatility—stemming from the exchange of notes for common stock—could lead to a depreciation in the value of the parent company’s stock, presenting a multi-faceted risk to the firm’s economic equilibrium.
The average AWK stock price target is $142.40, implying 14.60% upside potential.
To learn more about American Water Works’ risk factors, click here.
