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    Essential Utilities (WTRG) Could Be 3% Undervalued As Illinois Projects Advance

    Simply Wall St·10/18/2026 23:35:56
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    Aqua Illinois, part of Essential Utilities (WTRG), has kicked off 14 water and wastewater projects in Illinois totaling nearly $40 million, tied to a wider $492 million, five year infrastructure plan.

    Essential Utilities shares trade at US$40.83 and short term momentum has picked up, with a 1-day share price return of 1.34% and 7-day share price return of 4.75%. The 1-year total shareholder return of 2.63% contrasts with a much stronger 3-year total shareholder return of 37.72%, suggesting earlier strength has eased even as fresh project news helps rebuild interest.

    Scan for other regulated utilities making similar long term infrastructure pushes with our curated list of 42 power grid technology and infrastructure stocks

    Essential Utilities has moved on project news, yet still trades below both analyst targets and an estimate of fair value. Is that a cautious market pricing in real risks, or an opportunity opening up?

    Most Popular Narrative: 3% Undervalued

    Essential Utilities is framed as modestly undervalued in the prevailing narrative, with a fair value of $42.20 against the recent $40.83 close, and that gap is tied directly to a long runway of regulated spending and consolidation.

    Planned record infrastructure spending of about US$1.4b in 2025 and US$1.7b in 2026 on regulated water, wastewater and gas systems, with hundreds of millions of dollars already deployed in 2026, is expected to expand the rate base and can feed through into future revenue and net income as projects enter service and earn allowed returns.

    See why 21 investors see Essential Utilities as 3% undervalued.

    Result: Fair Value of $42.20 (UNDERVALUED)

    Still, the Essential Utilities story can change quickly if regulators push back harder on rate increases, or if merger approvals and integration drag longer than investors expect.

    Find out about the key risks to this Essential Utilities narrative.

    Another View: Essential Utilities On Earnings Multiples

    The fair value narrative paints Essential Utilities as about 7% undervalued, yet the P/E tells a more cautious story. At 20.9x earnings, the stock trades above the global water utilities average of 16.8x and above its own fair ratio of 19.1x, which points to less margin for error if growth disappoints.

    Put simply, investors are paying more than the wider industry and more than the fair ratio suggests the market could move toward. At the same time, the share price still sits a little below one estimate of fair value. The question is which signal matters more for you right now. See what the numbers say about this price — find out in our valuation breakdown.

    NYSE:WTRG P/E Ratio as at Oct 2026
    NYSE:WTRG P/E Ratio as at Oct 2026

    Next Steps

    If the mixed signals around Essential Utilities leave you undecided, use that tension as your prompt to dig into the underlying data now and form your own view. To weigh the downside against the upside in one place, start with the 2 key rewards and 2 important warning signs.

    Looking for more investment ideas beyond Essential Utilities?

    If Essential Utilities has you thinking harder about pricing, risk and income, use that momentum and line up a few fresh ideas side by side with it.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.