United Utilities Share Discussion Threads

[fangorn2] 16/1/2014 13:05

Morgan Stanley has raised its rating for United Utilities as part of its review into the UK water sector ahead of the Ofwat regulatory price review that will set prices for 2015-20.

"The 2014 regulatory review will clearly be tough but this is surely well known," the US bank said in a research report Thursday.

"We expect clarity on allowed returns shortly, which should remove uncertainty, and we think fears of dividend cuts are overdone."

Morgan Stanley said the industry is now at the "point of maximum uncertainty" ahead of the January 27th Ofwat review.

However, the regulatory risk that has been hanging over stocks has now been priced in, it said.

The bank estimates that Ofwat will set a so-called 'vanilla' weighted average cost of capital (WACC) - which does not take taxes into account - of 3.9%, implying a 10-60 basis-point cut to the returns proposed by the 10 water and sewerage companies in their business plans.

United Utilities has been labelled as Morgan Stanley's top pick in the sector as it offers good value and has "superior upside" than other water companies.

The stock's rating has been upgraded from 'equalweight' to 'overweight', while the target price has been cut from 780p to 775p.

"The stock is trading close to its regulated capital value (at just a 1.5% premium) and we see 17% upside to our new price target even factoring in a cut to the company's proposed allowed return."

United Utilities was trading 4% higher at 685.5p on Thursday morning.

Severn Trent has been left at 'equalweight' with a reduced target price of 1,696p (from 1,730p); Pennon, also rated 'equalweight', has had its target price lifted to 723p (from 685p).


hxxp://sharecast.com/news/broker-snap-morgan-stanley-upgrade...

[maurillac] 16/1/2014 09:24

excellent day so far. bought in december so feeling reasonably pleased today
gl
m

[philo124] 16/1/2014 08:56

Was talked out of topping up yesterday, JPM upgrade today.

[bantam175] 16/1/2014 08:50

Or third guess, they drilled for water and struck oil (as opposed to OPHR (held) who drilled for oil and struck water, in the sea mind you. I could have told them there was water in the sea)

[eggbaconandbubble] 16/1/2014 08:49

I can't access the MS. note but it appears they haven't increased their target price. Something else?

[bantam175] 16/1/2014 08:48

Also a motley article yesterday

[wad collector] 16/1/2014 08:45

Hard to imagine they are the cause , not that I have any better suggestions.

[bantam175] 16/1/2014 08:43

Raised to overweight by morgan stanley

[bantam175] 16/1/2014 08:40

Someone actually believing the Deutsche 800p target price maybe

[deadly] 16/1/2014 08:25

Why the 4% jump this morning? Behaving like an AIM stock.

[simongn] 12/1/2014 10:31

I got in earlier at 676.5p looking for 3% in Jan.

[pierre oreilly] 08/1/2014 13:07

just bought some more too, 6.573

[wad collector] 08/1/2014 12:53

Added a lump at 657. I think most of the political risk is in the price.

[tamboerskloof] 06/1/2014 23:18

Personally; I feel very comfortable holding UU especially during the Ex Div period which historically has an oscillating effect on the share price consequently, I am quietly pleased with current progress thus far, coupled with the above fool.co.uk article which Simon kindly posted, especially since, as stated within the article city brokers expect United Utilities to punch solid earnings growth of 12% in the year ending March 2014, to 43.8p per share, with a further 3% advance anticipated during the following 12 months to 45.2p. These figures leave the water provider trading on P/E ratings of 15.3 and 14.8 for these years, comfortably below a forward average of 18.5 for the complete gas, water and multi-utilities sector.

[simongn] 06/1/2014 20:40

From:

Is United Utilities Group plc Set For Electrifying Earnings Growth In 2014?

[tamboerskloof] 19/12/2013 19:02

Record date --- 20th Dec

[fangorn2] 18/12/2013 11:34

Are we not ex divi today, by some 12p..only down 7.5p, that's a result surely.

[wipo1] 12/12/2013 11:18

zeppo, pre-dividend buying?

[zeppo] 12/12/2013 11:09

wipo1

UU. up against the market.

Has your purchas boosted it?

Any other reason out there?

z

[wipo1] 12/12/2013 10:53

I am back in at 653p.

[redartbmud] 10/12/2013 15:58

Not as bad as mine at £6.987p!

[lord gnome] 10/12/2013 15:33

As we approach the 640 level, it looks as though my purchase was slightly mis-timed. Ho hum (bug).

[fangorn2] 10/12/2013 15:32

Joined you with an additional buy just now.
happy to sit on these in my ISA.

:)