Severn Trent maintained at 'overweight' by JPMorgan Cazenove

Severn Trent has had its 'overweight' rating maintained by JPMorgan Cazenove, which said it sees further upside potential for the shares as it hiked its target price.

It said the regulated business continued to perform strongly, with outperformance expected in full-year 2017 against Outcome Delivery Incentives (ODIs), net finance and totex allowances.

Analyst Christopher Laybutt increased the target price to 2250p, from 2160p.

He noted that underlying earnings per share of 108.7p beat JPMorgan's Cazenove's estimate of 101.6p, and the company-provided consensus of 101.3p.

"The beat was mainly driven by a surprise drop in net finance costs, with effective finance costs plunging 90 basis points to 4.5% in the period," Laybutt said in a note.

"As a result, we are upgrading our FY 2017/19 estimates by about 6% on average."