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deutsche bank upgrades pennon to hold following rights issue announcement

Deutsche Bank has upgraded Pennon to 'hold' from 'sell' and raised its price target to 570p from 490p, following a £490m rights issue. The stock has performed well post-announcement, and despite a material dividend cut, it is expected to yield around 6%, surpassing peers United Utilities and Severn Trent.

deutsche bank upgrades pennon group to hold raises price target to 5.70

Deutsche Bank has upgraded Pennon Group's stock rating from Sell to Hold, raising the price target to GBP5.70 following the company's announcement of a £490 million rights issue. Despite a significant dividend cut, the stock has performed well, with anticipated yields around 6%, surpassing peers like United Utilities and Severn Trent. Investors are advised to monitor the stock's performance as it transitions to ex-rights trading next week.

water utilities face dividend cuts as regulator decision approaches

UBS anticipates dividend cuts for water utilities following Ofwat's upcoming price regime decision on December 19. While a £125-135 annual bill increase is expected, Pennon Group is projected to report its weakest first-half results, with an EBIT of £83 million and a 25% dividend cut. United Utilities and Severn Trent are forecasted to perform better, with underlying EBITs of £326 million and £299 million, respectively.
14:56 13.11.2024
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