United Utilities Share Discussion Threads

[brain smiley] 01/5/2012 11:10

Upgraded today.


There is some sunshine on the horizon for the water sector amid the flood warnings, Morgan Stanley suggests.

The US broker has raised its target prices for all three UK-listed water utilities companies Pennon, Severn Trent and United Utilities thanks to a "benign backdrop".

Pennon's target is now 740 pence from 670 pence, Severn Trent goes up to 1,645 pence from 1,540 pence and United Utilities to 700 pence from 645 pence.

Morgan Stanley says as bad debts are under control, the transfer of private drains and sewers is having little impact on costs, while mooted changes to the regulatory framework will not harm investor confidence in the sector.

And with recent heavy rain sparking flood warnings, fears have been alleviated over hosepipe bans following the winter dry spell, while the threat from Ofwat seems "more and more distant", the broker concludes.

United Utilities (LON:UU.) is its top pick and has been upgraded to an 'overweight' stance from 'equal-weight' due to the better growth in its core business than the others.

United Utilities' dividend yield of 5.2 per cent for 2011/12 makes it "a safe place in an uncertain market", the broker adds.

Severn Trent's (LON:SVT) rating goes the other way and is downgraded to 'equal-weight' from 'overweight' due to the recent strong run for the shares and slower core growth.

Morgan Stanley still expects a return of capital from Severn Trent, with a possible 29 pence return to shareholders.

Pennon (LON:PNN) has a robust balance sheet despite its low relative yield for 2012/13 of 3.9 per cent.

The main worry at Pennon is the potential for near-term weakness at Viridor, its waste business, which could suffer due to dipping recycling prices and objections to the construction of energy from waste (EfW) plants across the UK.

[wad collector] 30/4/2012 12:52

I just sold a lump of mine and transferred back to SSE as they have weakened.I shall sit tight until they go xd (bigger yield than UU and similar profile).

[brain smiley] 27/4/2012 13:22

wad

Looks like a triangle on the 2 year chart - breakout area 630-635.

[wad collector] 27/4/2012 12:45

Wettest drought I have ever experienced ; we will soon be asked to turn on our hosepipes to stop the reservoirs overflowing.

Looking at the share price graph - hasn't it become a remarkably stable index over the last 2-3 yrs? Only 5% variation in the last 6 months.

[4spiel] 18/4/2012 18:12

What is the reason ? Sterling is in demand again and water assets -abundance in NW England- no foreign exposure and have good yields from captive buyers.

[beardmore] 05/4/2012 09:57

Derwent Valley Water (I'm long) is showing surprising strength.

[robertfaulkner] 04/4/2012 18:35

I've a limit buy of 591p but with this talk of foreign take overs of utilities I think I'll only strike if the market goes on with another 100 point fall tomorrow (very unlikely)

[essentialinvestor] 04/4/2012 17:46

Are they really still 90% full WS?,
not sure on that one.

I am aware that was mentioned as a figure previously.

Hosepipe ban in this area from Friday.

Some much needed rain over the last 24hrs.

[wstirrup] 30/3/2012 14:36

UU'S RESERVOIRS ARE OVER 90% FULL... So if the rest of the country (excluding Northumberland) want to buy some...maybe they can spare a bit...

That said, there's a little mix-up with the new contractor having to do a spot of recruiting...

[essentialinvestor] 28/3/2012 10:31

Reported this morning that the drought is spreading,
Yorkshire now nearing drought conditions was mentioned.

Hosepipe ban in my area from next week I think.

[essentialinvestor] 27/3/2012 14:25

I really do not like the debt accross the sector -
For a short term trade maybe.

Drought conditions here in the SE.

[wad collector] 27/3/2012 13:52

I just took SSEs strength to sell out and buy back in here.It is a lucrative little see-saw.

[praipus] 23/3/2012 13:14

Pension situation with BT.A easing might encourage foreign buyers to snap at all sorts of unexpected stocks.

[wad collector] 23/3/2012 13:10

762p?
I'm a fan of UU , but that sort of target looks unrealistic in the medium term.We haven't been there for years.Four.

[brain smiley] 22/3/2012 11:00

Thu Mar 22, 2012 10:47am GMT

Shares in United Utilities (UU) advance 1.8 percent to top a 1 percent weaker FTSE 100 after Britain's largest listed water utility says it is on track to report a good underlying performance for the full-year, prompting Investec Securities to repeat its "buy" rating.

UU says, in a pre-close season trading update, that its underlying operating profit for the second half will be lower than the first six months of the year as previously expected, but adds full-year sales will increase by between 3 percent and 4 percent.

Investec points out that, unsurprisingly, this is in line with the comments UU made in its interim management statement on Feb. 1.


"We continue to believe that UU remains one of the cheapest stocks in the sector, with an attractive yield (5.2 percent) and a 30 percent forecast total return suggested by our unchanged TP (target price)," of 762 pence, Investec says in a note.

Fellow UK water firm Severn Trent gains 0.9 percent.

[brain smiley] 20/3/2012 11:20

LONDON (SHARECAST) - Nomura has highlighted National Grid and United Utilities as its key picks in the UK utilities sector, but has warned that uncertainties still remain given the current climate and regulatory intervention.

"Energy continues to be a contentious issue in UK politics – the economic downturn, combined with a projected rise in energy costs, means that returns through the energy value chain are an easy target for politicians," the broker said.

Nomura said that the upcoming budget (tomorrow) could also deliver another surprise on the level of the carbon tax applicable from April 2014 onwards. It did also highlight the potential for positive news on North Sea gas assets. These factors, including possible intervention by Ofgem in energy supply and unknown details about the UK's Electricity Market Reform, have a created an "uncertain investment environment" for UK utilities; however concerns are higher about Continental Europe, the broker said.

"Given political uncertainty, anaemic fundamentals and negative real yields, we prefer the UK regulated utilities, which offer stable, inflation-indexed returns."

Nomura has labelled National Grid as its top 'buy' pick within UK utilities as it offers "growth opportunity in UK transmission and screens well on relative value." Within the UK water sector, the top 'buy' pick is United Utilities, which it says offers 13% equity upside potential and a competitive yield. Drax remains the broker's top 'reduce' pick as the stock is pricing in an "optimistic scenario on biomass".

As part of Nomura report, it made the following ratings changes:

Centrica: target raised from 340p to 350p, neutral rating unchanged.
Drax: target raised from 480p to 485p, reduce rating kept.
National Grid: target raised from 700p to 705p, buy rating kept.
Pennon: downgraded from buy to neutral, target lifted from 1,590p to 1,640p.
Severn Trent: downgraded from buy to neutral, target lifted from 1,590p to 1,640p.
SSE: reduce rating and 1,405p target maintained.
United Utilities: upgraded from neutral to buy, target raised from 625p to 695p.

[minky65] 02/3/2012 06:50

something to consider :

[holts] 18/2/2012 16:37

any takers for my mischievous suggestion earlier in the year for boi , will collect fee later !

[alphorn] 13/2/2012 10:53

....extended net bullish position (using options). Long may this share move sideways.

[praipus] 07/2/2012 09:50

FT's Merryn Somerset Webb on the subject of water

[zeppo] 02/2/2012 21:59

SVT, PNN and UU. fell today.

Explanations?

z

[essentialinvestor] 02/2/2012 19:58

Did I miss some comment or news on the sector today?.

[alphorn] 20/1/2012 22:22

Worth a read in tomorrow's FTLex.