Severn Trent, the Utilities sector company, was revisited by a Wall Street analyst yesterday. Analyst Sarah Lester from Morgan Stanley maintained a Buy rating on the stock and has a p3,300.00 price target.
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Sarah Lester’s rating is based on several key factors that highlight Severn Trent’s strong performance and potential for future growth. The company has upgraded its ODI guidance for the fiscal year, which is a positive indicator of its operational success and suggests continued outperformance under the new regulatory framework. This upgrade, occurring before the winter season, reflects management’s confidence in maintaining strong performance.
Additionally, Severn Trent has adjusted its FY26 guidance, showing a reduction in expected operational expenses and an increase in interest costs. However, the potential for earnings improvement is significant if operational expenses fall towards the lower end of the guidance range. Furthermore, the company is projecting an attractive return on regulated equity and growth in its regulatory capital value, reinforcing the positive outlook for investors.
SVT’s price has also changed slightly for the past six months – from p2700.000 to p2685.000, which is a -0.56% drop .