Severn Trent (SVT) AI Stock Analysis

• Market Cap: £9.47B
• Dividend Yield: 4.5%
• Average Volume (3M): 463.51K
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.51
• Revenue Growth: 10.68%
• EPS Growth: 35.18%
• Country: UK
• Employees: 7,040
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 1.01
• Shares Outstanding: 301,088,200
• 10 Day Avg. Volume: 505,828
• 30 Day Avg. Volume: 463,512
• PEG Ratio: 0.65
• Price to Book (P/B): 4.29
• Price to Sales (P/S): 3.13
• P/FCF Ratio: -11.17
• 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: £3,206.20
• Price Target Upside: 1.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.76
• Revenue Forecast (FY): £2.81B

• Rating: 71 Outperform
• Price Target: 3,496.00 p ▲(11.13% Upside)
• Action: Upgraded Date: 12/07/25
• Date: Action: Upgraded 12/07/25

Severn Trent's overall score reflects strong earnings call sentiment and positive technical indicators. Financial performance is solid but challenged by high leverage and negative free cash flow. Valuation is reasonable with an attractive dividend yield, supporting a stable investment outlook.

Positive Factors

Regulated revenue growth & margins

Severn Trent's core regulated business shows durable top-line growth and exceptionally high gross margins, reflecting stable tariffed revenues and efficient cost of water treatment. Under Ofwat regulation, predictable cashflows and strong gross margin support long-term revenue visibility and service delivery across AMP cycles.

Strong operating cash generation

Consistently rising operating cash flow demonstrates robust cash earnings from regulated operations, enhancing the group's ability to fund maintenance and growth capex, service interest, and support dividend policy. Strong OCF versus reported earnings indicates durable cash quality in a capital-intensive utility.

Operational outperformance via ODIs

Sustained ODI outperformance and high scores on leakage and pollution metrics translate into tangible regulatory rewards and higher RoRE. This operational consistency strengthens regulatory credibility, reduces penalty risk, and can unlock additional returns or capital reopeners across the AMP period.

Negative Factors

High financial leverage

Elevated leverage leaves the company more sensitive to interest rates and macro shocks, reducing financial flexibility for discretionary investments. Low equity proportion increases refinancing and covenant risk across multi-year AMP funding cycles and may constrain strategic optionality under adverse conditions.

Negative free cash flow due to capex

Persistent negative free cash flow signals heavy capital intensity to maintain and expand the regulated asset base. Over multiple AMP cycles this necessitates external financing, elevates indebtedness, and can pressure liquidity, particularly if regulatory funding or timing of allowances differs from actual outlays.

Regulatory & customer-service headwinds

Stricter regulatory standards and emerging PFAS requirements increase compliance capex and operating demands. Mid-table customer metric performance risks regulatory scrutiny and potential penalties; both factors can raise costs, reduce allowed returns, and require sustained investment to meet evolving standards.

Severn Trent Business Overview & Revenue Model

Company Description

Severn Trent Plc operates as a water and sewerage company in England and Wales. It operates in two segments, Regulated Water and Waste Water, and Business Services. The Regulated Water and Waste Water segment offers water and waste water services to approximately 4.8 million households and businesses in the Midlands and Wales. The Business Services segment generates renewable energy from anaerobic digestion, hydropower, wind turbines, and solar technology; manages and sells land; and offers search services. It also provides contract services to municipal and industrial clients in the United Kingdom; and the United Kingdom Ministry of Defense for design, build, and operation of water and waste water treatment facilities and networks, as well as services to developers. The company was founded in 1974 and is headquartered in Coventry, the United Kingdom.

How the Company Makes Money

Severn Trent makes most of its money from regulated water and wastewater services delivered by Severn Trent Water. Revenue is primarily earned by charging households and businesses for (1) clean water supply (including metered and unmetered tariffs) and (2) wastewater collection and treatment. Because this is a regulated utility, allowed revenues and returns are largely set through the UK regulatory framework (economic regulation by Ofwat), with customer bills structured to recover efficient operating costs, fund capital investment in networks and treatment assets, and earn an allowed return on the regulated asset base (RAB). The company also earns revenue from developer services (e.g., connections and network-related works for new housing and commercial developments) and from non-household/commercial offerings and environmental services provided through its non-regulated activities (such as solutions for industrial water management and related services). Key factors that drive earnings include the regulatory price control determinations, the size and growth of the RAB (linked to capital investment programs), customer demand/consumption patterns, performance incentives and penalties under the regulatory regime, inflation/indexation features embedded in the price control mechanisms, and efficiency in operating and financing the asset base.

Severn Trent Financial Statement Overview

Summary

Severn Trent shows strong revenue growth and solid operating profit margins. However, high leverage and negative free cash flow pose significant challenges, indicating potential vulnerability to external shocks.

Income Statement

Severn Trent has demonstrated consistent revenue growth over the past years, with a notable increase from £1.94 billion in 2022 to £2.43 billion in 2025. The gross profit margin is strong, consistently above 90%, which indicates efficient cost management. However, the net profit margin is relatively low, peaking at 9.45% in 2025, suggesting challenges in controlling non-operating expenses or taxes. EBIT and EBITDA margins have shown stability, supporting overall profitability.

Balance Sheet

The company maintains a high debt-to-equity ratio, reaching 5.48 in 2025, which may indicate potential financial leverage risks. However, the return on equity (ROE) improved to 12.95% in 2025, reflecting better profitability relative to shareholder equity. The equity ratio remains low at about 11.13%, suggesting a higher reliance on debt financing, which could pose risks during economic downturns.

Cash Flow

Operating cash flow has grown steadily, reaching £912.3 million in 2025, showing strong cash generation capability. However, free cash flow has become increasingly negative, culminating in -£680.5 million in 2025 due to high capital expenditures. The operating cash flow to net income ratio indicates strong cash earnings capability, but the negative free cash flow to net income ratio highlights potential liquidity challenges.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.65B	2.43B	2.34B	2.17B	1.94B	1.83B
Gross Profit	777.10M	2.23B	536.60M	1.27B	1.17B	1.10B
EBITDA	1.30B	1.16B	886.70M	1.03B	997.40M	891.50M
Net Income	315.40M	229.40M	140.20M	132.20M	-87.20M	212.20M
Balance Sheet
Total Assets	17.25B	15.91B	14.20B	12.24B	11.59B	11.09B
Cash, Cash Equivalents and Short-Term Investments	1.45B	1.02B	953.20M	34.20M	115.40M	56.20M
Total Debt	10.86B	9.70B	8.27B	7.30B	6.73B	6.62B
Total Liabilities	15.44B	14.14B	12.37B	11.27B	10.33B	9.95B
Stockholders Equity	1.81B	1.77B	1.83B	970.60M	1.26B	1.14B
Cash Flow
Free Cash Flow	-814.40M	-680.50M	-356.40M	-190.20M	62.90M	60.00M
Operating Cash Flow	869.20M	912.30M	813.30M	549.50M	709.50M	696.60M
Investing Cash Flow	-1.70B	-1.54B	-1.19B	-721.70M	-650.10M	-634.90M
Financing Cash Flow	1.24B	718.60M	1.30B	93.20M	4.30M	-66.30M

Severn Trent Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3146.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SVT, the sentiment is Positive. The current price of 3146 is below the 20-day moving average (MA) of 3170.10, above the 50-day MA of 3023.48, and above the 200-day MA of 2739.53, indicating a neutral trend. The MACD of 27.53 indicates Positive momentum. The RSI at 53.54 is Neutral, neither overbought nor oversold. The STOCH value of 52.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SVT.

Severn Trent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NG	76 Outperform	£67.41B	21.31	7.87%	4.15%	-9.52%	35.74%
SSE	74 Outperform	£32.75B	16.49	7.09%	2.98%	1.78%	-50.72%
UU	72 Outperform	£9.22B	8.14	20.43%	4.45%	15.76%	254.82%
SVT	71 Outperform	£9.47B	8.54	17.41%	4.50%	10.68%	35.18%
PNN	67 Neutral	£2.60B	9.64	2.50%	6.56%	19.50%	―
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CNA	59 Neutral	£9.40B	-112.68	-5.95%	2.86%	-4.82%	-123.58%

Severn Trent Corporate Events

Severn Trent Updates Market on Share Capital and Voting Rights

Severn Trent has updated the market on its share capital and voting rights position as of 28 February 2026, confirming an issued share capital of 303,306,820 ordinary shares, of which 2,218,618 are held in Treasury, leaving 301,088,202 voting rights in circulation. The disclosure provides investors and other stakeholders with the reference figure needed to assess and report changes in their holdings under the Financial Conduct Authority’s transparency rules, reinforcing ongoing compliance and clarity over the company’s equity structure.

The most recent analyst rating on (GB:SVT) stock is a Buy with a £3631.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Lifts Investment to Top of Range as Performance Targets Hold

Severn Trent reported strong early momentum in the current regulatory period, with operational and environmental performance on track and financial results in line with expectations. Benefiting from insourcing and early scaling of its programmes, the company now expects capital investment to reach the top end of its £1.7 billion to £1.9 billion guidance range, marking its highest-ever annual spend.

The utility anticipates at least £40 million of rewards from outcome delivery incentives and price control deliverables this year, and is confident of securing a 4-star Environmental Performance Assessment for a seventh consecutive year. New chief executive James Jesic said the capital programme is progressing well, reaffirmed guidance set at the interim results, and welcomed the Government’s recent water sector White Paper as a positive step as the company awaits further policy clarity later in the year.

The most recent analyst rating on (GB:SVT) stock is a Hold with a £3350.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Updates Market on Total Voting Rights and Share Capital

Severn Trent has confirmed that as of 31 January 2026 its issued share capital comprises 303,306,555 ordinary shares, of which 2,218,618 are held in treasury, leaving 301,087,937 shares carrying voting rights. The updated total voting rights figure provides the reference point investors must use when assessing whether their shareholdings trigger disclosure obligations under UK financial transparency rules, with implications for how significant stakes and changes in ownership are reported to the market.

The most recent analyst rating on (GB:SVT) stock is a Hold with a £3350.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Updates Market on Total Voting Rights and Share Capital

Severn Trent has confirmed that, as of 31 December 2025, its issued share capital comprises 303,304,639 ordinary shares, of which 2,218,618 are held in treasury, leaving 301,086,021 voting shares in circulation. The updated voting rights figure provides shareholders and market participants with the denominator needed to assess and report changes in their holdings under UK disclosure and transparency regulations, reinforcing compliance and transparency in the company’s shareholder base.

The most recent analyst rating on (GB:SVT) stock is a Buy with a £3000.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Director Helen Miles Sells 22,000 Shares but Retains Above-Required Stake

Severn Trent has disclosed that board director and Person Discharging Managerial Responsibilities (PDMR) Helen Miles sold 22,000 ordinary shares in the company on 18 December 2025 at a price of 2,758 pence per share on the London Stock Exchange, leaving her with a beneficial holding of 47,697 shares. The company noted that Miles continues to hold shares in excess of Severn Trent’s shareholding requirement for her role, signalling continued alignment of management interests with shareholders despite the disposal and indicating no change to the company’s governance or strategic direction.

The most recent analyst rating on (GB:SVT) stock is a Buy with a £3000.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.