Citi expresses concern around UK water utilities' premium valuation
Analysts at Citi on Wednesday recommended investors turn off the tap, cautioning they were increasingly concerned about UK water utilities' premium valuation.
FTSE 100
8,060.61
15:45 15/11/24
n/a
n/a
FTSE 250
20,508.75
15:45 15/11/24
n/a
n/a
FTSE 350
4,453.56
15:45 15/11/24
n/a
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FTSE All-Share
4,411.85
15:45 15/11/24
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Gas, Water & Multiutilities
6,050.22
15:44 15/11/24
0.21%
12.56
Pennon Group
567.00p
15:44 15/11/24
2.44%
13.50p
Severn Trent
2,687.00p
15:44 15/11/24
0.30%
8.00p
United Utilities Group
1,085.00p
15:45 15/11/24
0.09%
1.00p
Their share prices had run up by 83% since 2010, outperforming the wider sector by 101% during that time frame, analyst Jenny Ping said in a research note sent to clients.
She downgraded her recommendation on Pennon and Severn Trent to 'sell', while leaving its stance on United Utilities - its preferred UK play in the sector - at 'neutral'.
Ping flagged the risks the sector was facing including, potential changes to tax legislation, the at least £8bn-worth of regulatory asset valuations put up for sale and unsupportive falling return spreads.