Dividend cuts are expected for water utilities ahead of the upcoming price regime decision from regulator Ofwat.

Pennon Group PLC is predicted to experience a definitive cut, while the outlook for United Utilities Group PLC and Severn Trent PLC remains uncertain.

The regulator has proposed a £95 annual increase per household by 2029/30, but the industry is advocating for a £175 increase.

UBS estimates a compromise of £125-135.

In terms of financial performance, Pennon is expected to report the weakest results, with forecasts of £83 million EBIT and a loss per share of 1.8p.

On the other hand, United Utilities is projected to achieve underlying EBIT of £326 million and EPS of 20.3p, while Severn Trent is anticipated to report EBIT of £299 million and EPS of 41.7p.

UBS will closely monitor Pennon's financial leverage ratios, but maintains a 'buy' rating despite the expected 25% dividend cut.

United Utilities is also rated a 'buy' with a price target of 1,180p, while Severn Trent is rated a 'sell' with a price target of 2,390p, reflecting a 17% premium to RAB.