Severn Trent (SVT) AI Stock Analysis

• Market Cap: £8.14B
• Dividend Yield: 5.4%
• Average Volume (3M): 699.80K
• Price to Earnings (P/E): 35.3
• Beta (1Y): 0.61
• Revenue Growth: 5.38%
• EPS Growth: 86.34%
• Country: UK
• Employees: 7,040
• Sector: Utilities
• Sector Strength: 78
• Industry: Regulated Water
• EPS (TTM): 0.54
• Shares Outstanding: 300,704,700
• 10 Day Avg. Volume: 688,571
• 30 Day Avg. Volume: 699,798
• PEG Ratio: -0.21
• Price to Book (P/B): 6.98
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -35.62
• 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: £2,907.83
• Price Target Upside: 6.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: ―

Severn Trent demonstrates robust financial performance with strong revenue growth and operational efficiency, but high leverage and negative free cash flow due to capital expenditures are concerns. The technical indicators suggest positive momentum, while the high P/E ratio reflects a premium valuation. Positive corporate events, including strategic investments and growth plans, enhance the company's long-term outlook, contributing to a favorable stock score.

Positive Factors

Analyst Recommendation

National Grid now replaces Severn Trent as the analyst's 'Top Pick'.

Dividend Policy

The announcement of the dividend policy and acceptance of the Final Determination further de-risks the five-year outlook.

Growth Potential

The assessment is constructive on the underlying growth of Severn Trent.

Negative Factors

Stock Reaction

A small positive reaction in SVT shares is expected due to de-risking and clarity provided on dividend and no CMA appeal.

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 money primarily through the provision of water and wastewater services to residential, commercial, and industrial customers. Its revenue model is based on regulated tariffs set by the UK water industry regulator, Ofwat, which allows the company to charge customers for water supply and wastewater treatment. These charges are typically billed on a periodic basis, either through metered usage or fixed charges. Additionally, Severn Trent may generate revenue from ancillary services such as infrastructure maintenance, engineering services, and renewable energy initiatives. The company's earnings are influenced by regulatory price reviews, which determine allowable revenue and investment levels, as well as operational efficiency and customer service performance.

Severn Trent Financial Statement Overview

Summary

Severn Trent exhibits strong revenue growth and operational efficiency, as evidenced by stable EBIT and EBITDA margins. While the balance sheet reveals high leverage, the company is improving its equity and generating strong operating cash flows. Nonetheless, the persistent negative free cash flow due to capital expenditures poses a concern for future liquidity.

Income Statement

Severn Trent's revenue has shown consistent growth over the years, with a noticeable increase from 2023 to 2024. The gross profit margin has decreased from previous years, but net profit margin has improved slightly in 2024 compared to 2023. EBIT and EBITDA margins remain robust, indicating solid operational performance despite fluctuations in gross profit.

Balance Sheet

The company's debt-to-equity ratio is relatively high, reflecting significant leverage, which is common in regulated utilities. However, the increase in stockholders' equity suggests a strengthening equity position. Return on equity has improved, indicating better utilization of equity capital to generate profits.

Cash Flow

Operating cash flow has increased, demonstrating strong cash generation capabilities. However, free cash flow remains negative due to high capital expenditures. The operating cash flow to net income ratio is favorable, indicating efficient conversion of income into cash.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.39B	2.34B	2.17B	1.94B	1.83B	1.84B
	Gross Profit
582.70M	536.60M	1.27B	1.17B	1.10B	1.15B
	EBIT
549.50M	472.90M	574.00M	556.00M	527.30M	585.60M
	EBITDA
939.10M	886.70M	948.40M	940.10M	845.00M	886.60M
	Net Income Common Stockholders
230.00M	140.20M	132.20M	-87.20M	212.20M	158.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.06B	953.20M	34.20M	115.40M	56.20M	48.60M
	Total Assets
14.95B	14.44B	12.24B	11.59B	11.09B	10.85B
	Total Debt
8.82B	8.27B	7.30B	6.73B	6.62B	6.43B
	Net Debt
7.76B	7.32B	7.27B	6.62B	6.56B	6.39B
	Total Liabilities
13.13B	12.61B	11.27B	10.33B	9.95B	9.61B
	Stockholders Equity
1.82B	1.83B	970.60M	1.26B	1.14B	1.24B
Cash Flow		Free Cash Flow
-483.70M	-356.40M	-190.20M	62.90M	60.00M	-137.70M
	Operating Cash Flow
861.30M	813.30M	549.50M	709.50M	696.60M	714.30M
	Investing Cash Flow
-1.32B	-1.23B	-721.70M	-650.10M	-634.90M	-803.50M
	Financing Cash Flow
1.29B	1.54B	93.20M	4.30M	-66.30M	98.20M

Severn Trent Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2721.00
• 50DMA: Positive
• 100DMA: Positive
• 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:SVT, the sentiment is Positive. The current price of 2721 is above the 20-day moving average (MA) of 2655.59, above the 50-day MA of 2612.07, and above the 200-day MA of 2506.64, indicating a bullish trend. The MACD of 24.81 indicates Negative momentum. The RSI at 60.92 is Neutral, neither overbought nor oversold. The STOCH value of 69.23 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	73 Outperform	£51.03B	16.89	8.35%	5.93%	-7.42%	5.84%
SVT	71 Outperform	£8.14B	35.33	12.73%	5.40%	5.38%	86.34%
Sector *	64 Neutral	$8.54B	10.40	4.24%	4.63%	4.14%	-13.05%
AEP		£326.97M	6.21	12.40%	2.87%	―	―
SSE	71 Outperform	£19.52B	16.40	12.29%	2.39%	-13.09%	231.40%
UU	64 Neutral	£7.92B	29.93	13.05%	2.97%	8.61%	―
PNN	56 Neutral	£2.33B	―	-4.44%	5.95%	20.25%	-128.71%

Severn Trent Corporate Events

Severn Trent Plc Updates on Share Capital and Voting Rights

Severn Trent Plc has announced that as of April 30, 2025, its issued share capital consists of 302,653,694 ordinary shares, with 2,438,224 shares held in Treasury. This results in a total of 300,215,470 voting rights available to shareholders, which is crucial for determining shareholder interests under the FCA’s Disclosure Guidance and Transparency Rules.

Spark’s Take on GB:SVT Stock

According to Spark, TipRanks’ AI Analyst, GB:SVT is a Outperform.

Severn Trent demonstrates robust financial performance with strong revenue growth and operational efficiency, but high leverage and negative free cash flow due to capital expenditures are concerns. The technical indicators suggest positive momentum, while the high P/E ratio reflects a premium valuation. Positive corporate events, including strategic investments and growth plans, enhance the company’s long-term outlook, contributing to a favorable stock score.

To see Spark’s full report on GB:SVT stock, click here.

Severn Trent Announces Share Capital and Voting Rights Update

Severn Trent Plc has announced its issued share capital as of March 31, 2025, consisting of 302,650,803 ordinary shares, with 2,438,224 shares held in Treasury. This results in a total of 300,212,579 voting rights, which shareholders can use for regulatory compliance under the FCA’s Disclosure Guidance and Transparency Rules.

Severn Trent Unveils Ambitious Plans for Future Growth and Sustainability

Severn Trent hosted a Capital Markets Day to outline its ambitious plans for AMP8 and beyond, following the acceptance of the PR24 Final Determination. The company aims to achieve sector-leading operational performance, including a significant reduction in leakage and storm overflow spills by 2030. Severn Trent projects a net operational outperformance of over £300 million in AMP8, driven by efficiency improvements and strategic reinvestments. The company is investing in infrastructure upgrades and advanced technology to enhance service delivery and environmental standards, positioning itself for long-term growth and resilience.

Severn Trent Updates on Share Capital and Voting Rights

Severn Trent Plc has announced its current share capital and voting rights as of February 28, 2025. The company has issued 302,649,197 ordinary shares, with 2,438,224 held in treasury, resulting in 300,210,973 voting rights available for shareholders. This information is crucial for stakeholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.