Pennon Share Discussion Threads

[miata] 09/11/2012 08:21

09 Nov Pennon Group PLC PNN HSBC Overweight 0.00 677.50 830.00 820.00 Upgrades

HSBC has upgraded its recommendation on Pennon Group to 'overweight' from 'neutral' after the recent stock derating. Shares in Pennon have fallen in value by over 7 per cent in the past month. The City broker has lowered its share price target to 820 pence from 830 pence.

Analyst Verity Mitchell said: "On 29 October, as expected, Ofwat published its revised proposals for licence changes. It proposes, among other things, to set alternative forms of price control for wholesale activities. "In 2012, 76% of its operating profit was generated from South West Water, its regulated business.
"We estimate this proportion will fall to 59% by 2016 following the commissioning of a number of Energy from Waste projects.

"Pennon stock performance has been adversely affected by challenging conditions in waste, which are perceived to be more cyclical than the UK pure water plays.

"Our target price implies a potential return of 18.4%, which is above the neutral band; therefore, we upgrade our rating to overweight from neutral."

[spacecake] 08/11/2012 22:57

From the FT...

Pennon fell 2.2 per cent to 677.5p after Goldman Sachs downgraded it to "sell". Investors were overvaluing earnings growth from energy-from-waste projects and ignoring the potential increased volatility in earnings, Goldman argued.

Nomura Securities also turned negative on the water sector, citing regulatory risk and stretched valuations. United Utilities edged 0.2 per cent lower at 659p and Severn Trent was down 1.3 per cent at £15.17.

Rumours of takeover interest in the water utilities looked "plausible" but had already been reflected in share prices, with United and Severn both pricing in a one-fifth probability of a bid within the next six months, Nomura said.

[global mega boom] 08/11/2012 16:47

low for teh year now and on high volume :/ looks like 660 is next stop

[global mega boom] 08/11/2012 15:59

days like this should be when utils go UP! not leading teh way DOWN!

[ohisay] 08/11/2012 14:18

Good article..




Ofwat plans to publish its final consultation on the regulatory framework in December. For Pennon, any proposals for further competition in retail supply are important because of the footprint of its customer base. Operating in the South West of the country, Pennon has fewer heavy industrial customers, with its base skewed to private households.

In the current regulatory periods price rises have been linked to retail price index (RPI) inflation. However, the Office for National Statistics has proposed changes to the way RPI is calculated, which could mean that the new method of measuring inflation could be lower than under the current system. This has also created a layer of uncertainty.

This cloudy outlook has led to a number of rating downgrades by analysts on the sector players over the past few months.

Unique in the UK-listed water companies, about 40pc of Pennon's business does not fall under the Ofwat framework. This, obviously, reduces the regulatory risk. Also, although the price of recycled materials has been weak because of the subdued economic back-drop, analysts are hopeful prices can improve.

Indeed, there was good news from Viridor yesterday which has helped reverse the recent decline in Pennon's share price.

[miata] 08/11/2012 08:33

Nomura still aiming at 730p.

08 Nov Pennon Group PLC PNN Nomura Neutral 697.50 692.50 755.00 730.00 Reiterates

[global mega boom] 08/11/2012 08:13

still leaking ! :(

[miata] 07/11/2012 19:32

Part of the pre-start for the 2014 price review:




The water industry has regulatory reviews every five years. 1999 for 2000-2005, 2004 for 2005-2010, 2009 for 2010-2015, 2014 for 2015-2020 etc.

Demand for water shares tends to fall off in the second half of the regulatory period as shareholders start to get apprehensive about the next review. Water share prices though are equally affected by the general stockmarket and this hesitancy may not always be reflected in the shareprice. Nevertheless water shares seem to do best in the two years following a review.

[global mega boom] 07/11/2012 17:31

well spotted :) so its a value thing then... no more the safe haven trade?

[miata] 07/11/2012 11:43

No, its a broker downgrade thing. Citigroup on upcoming regulatory uncertainty, the new price controls for 2014 due before the end of the year and the fiddling with RPI (which was flagged in the link in my post 537 on 27/09/12).


Citigroup cut adjusted EPS estimates by 5% for 2014E and 2015E, reflecting updated RPI assumptions and higher costs in the water businesses, partly offset by lower interest expenses. We also lower our Viridor waste business numbers on the weak economic environment and waste recyclate pricing.

We set our Pennon target price at 650p, an 8% premium to RCV, and downgrade to Sell on valuation grounds. In our view, the low dividend yield of 4% and 15% RCV premium in 2014E is not reflective of the regulatory risk and lower-than-average RCV growth in the water business, nor of the reduced visibility in the cyclical parts of Viridor and execution risk on the EfW pipeline.


07 Nov Pennon Group PLC PNN Citigroup Sell 706.00 713.50 720.00 650.00 Downgrades

[global mega boom] 07/11/2012 08:16

why are they selling Utilities? is it a fiscal cliff thing?

[uhound] 06/11/2012 11:01

Have added here today.

Have always done well trading this share.

Contract win should help sentiment at this level too.

[miata] 06/11/2012 09:50

Pennon edged higher after signing a 25-year South London Waste Treatment Services Public Private Partnership contract for the London Boroughs of Croydon, Kingston, Merton and Sutton.

[miata] 02/11/2012 08:51

No, downgrades. Low volume, small size trades, though mostly sells at present.

02 Nov Pennon Group PLC PNN Credit Suisse Underperform 710.50 717.50 690.00 690.00
02 Nov Pennon Group PLC PNN Deutsche Bank Hold 710.50 717.50 800.00 718.00

[global mega boom] 02/11/2012 08:49

tree shake?

[zulu001] 01/11/2012 20:22

I'm monitoring water stocks, but i need either a market drop or them to start showing just a little upside first - I still think they are expensive.

CNBC did list various 'Sandy' stocks, including glass manufacturers and timber suppliers, but I didn't find any with especially interesting charts, though I was tempted by Home Depot (HD), its put on about 4.5% in the last couple of days but it spiked too high on Wednesday.

[global mega boom] 01/11/2012 20:04

Do u think PNN still got legs then zulu?

good idea on the plaster board trade btw, did u find any stocks to trade

[zulu001] 01/11/2012 19:23

Pennon Group's stock had its "overweight" rating reiterated by investment analysts at JPMorgan Chase in a note issued to investors on Thursday. They currently have a 780p target price on the stock.

Pennon Group opened at 718p on Thursday. Pennon Group has a 52-week low of 665.5p and a 52-week high of 797p. The company's market cap is £2.586 billion.

A number of other firms have also recently commented on PNN. Analysts at RBC Capital reiterated an "outperform" rating on shares of Pennon Group in a research note to investors on Wednesday. Finally, analysts at Credit Suisse reiterated an "underperform" rating on shares of Pennon Group in a research note to investors on Tuesday, September 25th.

[global mega boom] 01/11/2012 19:05

water company's seem out of sorts lately, PNN losing 720 again wonder whats up? did they just get to expensive? is some news coming? so many questions

[spacecake] 09/10/2012 09:16

Pulp Friction was established in 1995. It has a growing customer base across the UK and is now one of the country's leading paper merchants.

With a head office and recycling centre on the banks of the Thames, just east of London, Pulp Friction has recycling depots around the UK in Birmingham, Manchester, Liverpool, Newcastle and Worcester.

Pulp Friction the movie...

[northernlass] 04/10/2012 03:06

BROKERS REMAIN BULLISH FOR PENNON

03 September 2012

JPMorgan Chase reiterated their Overweight rating on shares of Pennon Group (LON: PNN) in a research note issued to investors on 03 September. The firm currently has a 780p target price on the stock.

04 September 2012

Pennon Group's stock had its "BUY" rating reiterated by investment analysts at Bryan Garnier & Cie in a note issued to investors on 04 September. They currently have a 840p target price on the stock.

20 September 2012

Deutsche Bank retains its "BUY" recommendation for Pennon Group with a target price of 800p.

03 October 2012

Pennon Group's stock had its "OUTPERFORM" rating reiterated by equities research analysts at RBC Capital in a research note issued to investors on Wednesday. They currently have a 820p price target on the stock.



P.S.
Here's some links about SCLP, one of the hottest stocks at the moment:

[rogsim] 27/9/2012 14:53

nerja,

It might be that there is some read across to Viridor from Shanks profit warning, especially as we know that Viridor is facing tough trading conditions.

[miata] 27/9/2012 14:12

Michael Hellings sold 10,633 shares at £7.47058p per share on 25th Septtember.

25 Sep Pennon Group PLC PNN Morgan Stanley Equal weight 717.50 747.00 740.00 740.00 Reiterates

Pennon Group stock had its "underperform" rating restated by equities researchers at Credit Suisse in a report issued on Tuesday. They currently have a 690p target price on the stock. Pennon Group has a one year low of 656.5p and a one year high of 797p.

PNN has been the subject of a number of other recent research reports. Analysts at Bryan Garnier & Cie reiterated a "buy" rating on shares of Pennon Group in a research note to investors on Tuesday, September 4th. Analysts at JPMorgan Chase reiterated an "overweight" rating on shares of Pennon Group in a research note to investors on Monday, September 3rd.


Weekend share tips : Severn Trent, Pennon Group, G4S, Qinetiq
26/09/2012 by ukcitymedia.co.uk about : Newspaper Share Tips

The Times Tempus thinks utilities such as Severn Trent and Pennon Group offer potential capital gains and returns that 'look more attractive than many other stock market sectors'.


Pennon now has the smallest market cap in the FTSE100.

[nerja] 27/9/2012 14:03

Any ideas why this is coming off so much of late, no position yet, but its starting to appear tempting.

[spacecake] 14/8/2012 17:26

There must be people making a small fortune out of this price manipulation !!!

July 27 2012

Market Report: Cold water poured on Pennon bid talk
Pennon has been one of the groups suggested as a possible target, but yesterday Credit Suisse played down the likelihood of major takeovers. Saying that while affluent sovereign wealth funds are likely to snap up unlisted companies, analysts from the broker warned they did "not expect appetite for large-scale, hostile buy-outs".

They went on to add that if "a buyout were to take place we would view Severn Trent as the most likely candidate", as the group ticked up 19p to 1,713p. However, Pennon was left 9p weaker at 754.5p, with the scribblers also downgrading their advice on the stock by two notches from "outperform" to "underperform".

Aug 14th 2012
Rumours of bid activity in the water utility sector were making its rounds on Tuesday, pushing up share prices of United Utilities (UU.), Severn Trent (SVT) and Pennon Group (PNN).