Severn Trent (AO) | Hold | FY25/26 results: strong (mostly expected), with 2028 guidance upgrade

研报英文原文证据摘录

Severn Trent (AO) | Hold | FY25/26 results: strong (mostly expected), with 2028 guidance upgrade

Severn Trent Hold | Target Price: 3300p

Company description Management

Severn Trent Water is one of the leading regulated UK water companies. The Liv Garfield, CEO

group serves an extensive network of customers and communities spanning Helen Miles, CFO

4.8m households and businesses in total and some 8m people, with 2bn m3 of Christine Hodgson, Chair of the Board

drinking water supplied and 3.2bn m3 of wastewater treated every day through Key shareholders

over 50,200 km of clean water pipes and over 92,900 km of sewer pipes. It was Free float 100.00%

established in 1974 from the amalgamation of the Severn and the Trent River Qatar Investment Authority 11.58%

Authority and was privatised in 1989. BlackRock 7.35% Lazard 5.82%

Investment case Valuation methodology

Severn Trent is a UK water company that operates under a fully SOP model with each segment having its own DCF model.

regulated model, under which the expected regulatory capital 2.0% inflation and 6.0% WACC, with long-term RCV as terminal

value (RCV) growth and efficient operations should pave the way value.

for higher earnings going forward. Debt, provisions, and financial assets at book value.

Given that it operates in a fully regulated, mature market, Risks to our rating

Severn Trent benefits from good regulatory and earnings Major deviations (positive or negative) in asset performance,

visibility going forward. operating targets, and investment expectations.

Severn Trent has been a top performer within the UK water Changes in regulatory conditions and debt markets.

regulated names, trading at a premium to peers Dramatic interest rate movements with a lag in regulatory

Catalysts adjustments.