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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.
ubs maintains buy rating on eon with target price of 16.20 euros
UBS has maintained a "Buy" rating on Eon with a target price of 16.20 euros. Analyst Mark Freshney noted that the European utility sector has lagged behind the market due to rising bond yields and concerns over capital needs, despite stable earnings momentum and low valuations that suggest growth potential. Freshney's top picks include Iberdrola, Eon, National Grid, and SSE, while he holds a negative outlook on Severn Trent, Uniper, and Verbund.
UBS has maintained a Sell rating on Severn Trent Plc, setting a price target of GBP23.90, citing a premium valuation with a P/E ratio of 32.7. Despite the company's strong operational performance and a 33-year dividend track record, analysts believe the stock price reflects anticipated regulatory benefits, with a significant debt burden of 4.85. Jefferies downgraded the stock from Buy to Hold, while Citi upgraded its rating to Neutral, acknowledging improved financial health but noting the shares still trade at a premium compared to industry peers.
european markets expected to open higher amid inflation concerns and earnings reports
European stocks are poised for a slight increase amid mixed market sentiment, following Nvidia's disappointing earnings forecast that impacted Asian semiconductor stocks. Meanwhile, shares of India's Adani Group plummeted after its chairman faced federal bribery charges, with significant losses across its companies. Concerns over stretched market valuations and inflation persist, as Federal Reserve officials express caution regarding economic stability.
european markets poised for higher open amid geopolitical tensions and earnings reports
European markets are set to open higher as traders monitor escalating tensions in the Ukraine-Russia conflict. The U.K.’s FTSE 100 is expected to rise 4 points, while Germany’s DAX, France’s CAC, and Italy’s FTSE MIB are projected to gain 46, 23, and 118 points, respectively. Key earnings reports from Severn Trent and British Land, along with U.K. inflation data, are also on the agenda.
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.
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