Pennon Group plc (PNN) AI Stock Analysis

• Market Cap: £2.20B
• Dividend Yield: 7.39%
• Average Volume (3M): 955.08K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: 15.42%
• EPS Growth: -406.43%
• Country: UK
• Employees: 4,000
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): -0.04
• Shares Outstanding: 471,972,800
• 10 Day Avg. Volume: 1,457,066
• 30 Day Avg. Volume: 955,078
• PEG Ratio: -0.06
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 1.22
• P/FCF Ratio: -2.23
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £568.33
• Price Target Upside: 23.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 58 Neutral
• Price Target: 490.00p ▲(6.06% Upside)

The overall stock score of 58 reflects a mixed outlook. The company's financial performance is challenged by declining profitability and increasing leverage, while technical indicators suggest a bearish trend. Valuation is difficult due to negative earnings, though the high dividend yield is a positive. The earnings call provided some optimism with strategic growth and investments, but operational challenges persist.

Pennon Group plc Business Overview & Revenue Model

Company Description

Pennon Group Plc provides clean water and wastewater services in the United Kingdom. It provides water and wastewater services for customers in Cornwall, Devon, and parts of Dorset and Somerset; water-only services in the areas of Dorset, Hampshire, and Wiltshire; and water and wastewater retail services to non-household customers in Great Britain. The company also offers regulated water to approximately 1.2 million customers in the Bristol region. It serves approximately 50 million household and non-household customers. The company was incorporated in 1989 and is based in Exeter, the United Kingdom.

How the Company Makes Money

Pennon Group generates revenue primarily through the provision of water and wastewater services, which are regulated by Ofwat, the water services regulator in England and Wales. The company earns money from customer water bills, which include charges for water supply and sewage treatment. Additionally, Viridor contributes significantly to revenue through its waste management operations, which involve the collection, recycling, and energy recovery from waste. Partnerships with local authorities and businesses for waste services further enhance this revenue stream. Pennon also benefits from regulatory incentives for improving environmental standards and efficiency, which can lead to additional earnings through performance-based payments.

Pennon Group plc Financial Statement Overview

Summary

Pennon Group plc shows revenue growth but faces profitability challenges with declining net income and margins. The balance sheet indicates increasing leverage, posing potential risks. Cash flow concerns arise from negative free cash flow, although operating cash flow generation is a strength.

Income Statement

The company has shown a positive revenue growth trend, with a notable increase in total revenue from £624.1 million in 2021 to £1.048 billion in 2025. However, the net income has significantly declined, leading to a negative net profit margin in recent years. Gross profit margin remains strong, but declining EBIT and EBITDA margins indicate pressure on operational efficiency.

Balance Sheet

The debt-to-equity ratio has increased over the years, reflecting higher leverage, which could pose risks if not managed properly. The return on equity has suffered due to net losses, and while the equity ratio remains stable, the increasing liabilities are a concern.

Cash Flow

Operating cash flow has declined, and free cash flow is negative, indicating cash flow challenges. The company's increased capital expenditures are affecting free cash flow. However, the ability to generate operating cash flow relative to net income is a positive aspect.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	787.00M	1.05B	906.80M	797.20M	792.30M	624.10M
Gross Profit	748.30M	995.90M	856.00M	506.70M	532.30M	411.60M
EBITDA	216.40M	302.90M	319.90M	261.00M	368.60M	310.50M
Net Income	-44.10M	-57.90M	-9.50M	100.00K	15.40M	79.50M
Balance Sheet
Total Assets	7.05B	7.05B	6.23B	5.19B	5.34B	6.42B
Cash, Cash Equivalents and Short-Term Investments	417.90M	417.90M	145.40M	165.40M	519.00M	2.92B
Total Debt	4.54B	4.54B	3.97B	3.13B	3.20B	2.85B
Total Liabilities	5.60B	5.60B	5.07B	4.06B	4.06B	3.44B
Stockholders Equity	1.45B	1.45B	1.16B	1.12B	1.27B	2.98B
Cash Flow
Free Cash Flow	-428.95M	-575.10M	-450.00M	-173.70M	25.90M	15.90M
Operating Cash Flow	78.65M	93.50M	148.90M	157.50M	254.90M	206.20M
Investing Cash Flow	-666.70M	-676.40M	-658.00M	-330.50M	-639.60M	3.44B
Financing Cash Flow	866.80M	866.80M	510.80M	-180.60M	-2.02B	-1.43B

Pennon Group plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 462.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:PNN, the sentiment is Negative. The current price of 462 is below the 20-day moving average (MA) of 469.24, below the 50-day MA of 481.30, and above the 200-day MA of 451.97, indicating a neutral trend. The MACD of -5.01 indicates Negative momentum. The RSI at 46.64 is Neutral, neither overbought nor oversold. The STOCH value of 65.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:PNN.

Pennon Group plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NG	72 Outperform	51.55B	16.85	7.68%	4.50%	-7.42%	5.84%
SSE	69 Neutral	18.33B	15.34	9.86%	3.85%	-3.11%	-31.10%
UU	61 Neutral	7.84B	29.26	13.24%	4.51%	10.04%	0.00%
SVT	60 Neutral	7.70B	33.23	12.95%	4.76%	3.78%	50.18%
PNN	58 Neutral	£2.20B	―	-4.44%	7.39%	15.42%	-406.43%
CNA	52 Neutral	7.91B	-34.18	30.12%	2.85%	-4.82%	-123.58%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Pennon Group plc Corporate Events

Pennon Group Issues GBP 300 Million Fixed-Rate Notes

Pennon Group plc has announced the issuance of GBP 300 million in fixed-rate notes due 2031 through its subsidiary, South West Water Finance Plc. This financial move under its Euro Medium Term Note Programme is expected to bolster the company’s financial standing and support its long-term strategic objectives.

The most recent analyst rating on (GB:PNN) stock is a Buy with a £5.70 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Pennon Group Announces Total Voting Rights and Capital Update

Pennon Group plc announced its total voting rights and capital as of August 31, 2025, with an issued share capital of 471,978,443 ordinary shares and 5,628 shares held in treasury, resulting in 471,972,815 voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules, impacting how stakeholders manage their interests in the company.

The most recent analyst rating on (GB:PNN) stock is a Hold with a £493.00 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Pennon Group Announces Executive Share Awards

Pennon Group plc announced transactions involving its top executives, CEO Susan Jane Davy and CFO Laura Flowerdew, who were awarded ordinary shares as part of the company’s 2025 AIBP. These shares are deferred for three years, reflecting a strategic move to align management incentives with long-term company performance. The transactions were conducted on the London Stock Exchange, indicating the company’s ongoing commitment to transparency and regulatory compliance.

The most recent analyst rating on (GB:PNN) stock is a Hold with a £509.00 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Pennon Group’s South West Water Finance Secures Approval for £2.5 Billion EMTN Programme

South West Water Finance Plc, a subsidiary of Pennon Group plc, has announced the approval of a £2.5 billion Euro Medium Term Note Programme by the Financial Conduct Authority. This development is significant as it provides the company with a robust financial instrument to support its operations and strategic initiatives, potentially impacting its market positioning and offering new opportunities for stakeholders.

The most recent analyst rating on (GB:PNN) stock is a Hold with a £509.00 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Pennon Group Executives Increase Stake in Company through Share Incentive Plan

Pennon Group plc announced that its Group Chief Executive Officer, Susan Jane Davy, and Group Chief Financial Officer, Laura Flowerdew, have both purchased ordinary shares as part of the company’s Share Incentive Plan. This transaction, conducted on the London Stock Exchange, reflects a strategic move to align the interests of the company’s leadership with those of its shareholders, potentially strengthening stakeholder confidence.

The most recent analyst rating on (GB:PNN) stock is a Buy with a £6.70 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Pennon Group Announces Total Voting Rights and Capital

Pennon Group plc has announced its total voting rights and capital as of July 31, 2025. The company’s issued share capital consists of 471,977,902 ordinary shares, with 5,628 shares held in treasury, resulting in a total of 471,972,274 voting rights. This figure is important for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:PNN) stock is a Buy with a £8.00 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.