United Utilities (UU) AI Stock Analysis

• Market Cap: £7.56B
• Dividend Yield: 6.24%
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 28.3
• Beta (1Y): 0.52
• Revenue Growth: 10.04%
• EPS Growth: N/A
• Country: UK
• Employees: 6,000
• Sector: Utilities
• Sector Strength: 71
• Industry: Regulated Water
• EPS (TTM): 0.23
• Shares Outstanding: 681,888,400
• 10 Day Avg. Volume: 1,298,669
• 30 Day Avg. Volume: 1,440,999
• PEG Ratio: 0.20
• Price to Book (P/B): 3.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -107.32
• 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: £1,226.29
• Price Target Upside: 11.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 62 Neutral
• Price Target: 1,162.00p ▲(5.78%Upside)

The overall score reflects the company's solid financial performance with strong revenue growth and efficient cost management, mitigated by high leverage and liquidity concerns. Technical indicators point to bearish momentum, while the valuation suggests overvaluation balanced by a high dividend yield.

Positive Factors

Dividend Policy

The announcement of the continuation of the existing dividend policy reflects annual growth in line with CPIH, which is a de-risking event.

Earnings Guidance

Initial FY26 guidance suggests upward pressure on consensus.

Net Income Forecast

A prudent scenario of returning underlying net income that is approximately 8% above consensus estimates.

Regulatory Clarity

Confirmation of no CMA appeal provides valuable clarity for the next five-year regulatory period.

Negative Factors

Market Attention

Announcements elsewhere in the sector may divert market attention from United Utilities.

Regulatory Challenges

For this first year of the regulatory period, FY26, the company expects to be in penalty territory on customer ODIs.

United Utilities Business Overview & Revenue Model

Company Description

United Utilities Group PLC provides water and wastewater services in the United Kingdom. It is also involved in the renewable energy generation, corporate trustee, financing, and property management activities; and provision of consulting, and project management services. The company operates 42,000 kilometers of water pipes; and 78,000 km of wastewater pipes. United Utilities Group PLC was incorporated in 2008 and is based in Warrington, the United Kingdom.

How the Company Makes Money

United Utilities makes money primarily through the provision of regulated water and wastewater services. The company's revenue model is largely based on customer billing, which includes household and non-household customers paying for water usage and wastewater management. Prices charged to customers are regulated by Ofwat, the economic regulator for the water sector in England and Wales, which sets price limits based on factors like the company's investment needs, operational costs, and performance targets. Additionally, United Utilities may generate income through various infrastructure projects and initiatives aimed at improving water efficiency and sustainability. The company occasionally engages in partnerships or collaborations to enhance service delivery and operational efficiency, but its core earnings are substantially derived from its regulated activities.

United Utilities Financial Statement Overview

Summary

United Utilities shows strong revenue growth and efficient cost management, as evidenced by a high gross profit margin. However, the high debt-to-equity ratio and negative free cash flow present financial risks that need addressing to enhance profitability and liquidity.

Income Statement

United Utilities shows strong revenue growth with a substantial increase of 10% from the previous year. The gross profit margin has remained robust at approximately 93%, indicating efficient cost management. However, the net profit margin is modest at around 12.3%, suggesting room for improvement in overall profitability.

Balance Sheet

The company's balance sheet reflects a high debt-to-equity ratio of 5.39, which indicates significant leverage and potential financial risk. The equity ratio stands at 11.9%, showing a relatively low proportion of equity financing. Return on equity is 13.2%, highlighting effective use of equity to generate income.

Cash Flow

Operating cash flow is strong compared to net income, indicating good cash generation from operations. However, free cash flow is negative, raising concerns about cash outflows exceeding inflows. The free cash flow to net income ratio is -0.3, pointing to potential liquidity challenges.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.15B	1.95B	1.82B	1.86B	1.81B
Gross Profit	2.00B	1.66B	754.10M	884.30M	874.30M
EBITDA	1.19B	992.70M	1.18B	1.19B	1.16B
Net Income	264.70M	126.90M	204.90M	-56.80M	453.40M
Balance Sheet
Total Assets	16.77B	15.65B	14.53B	14.44B	14.18B
Cash, Cash Equivalents and Short-Term Investments	1.67B	1.40B	340.40M	240.90M	744.10M
Total Debt	10.79B	10.00B	8.44B	7.98B	8.45B
Total Liabilities	14.77B	13.60B	12.02B	11.48B	11.15B
Stockholders Equity	2.00B	2.06B	2.51B	2.96B	3.03B
Cash Flow
Free Cash Flow	-79.90M	-19.00M	93.50M	305.90M	221.80M
Operating Cash Flow	918.10M	745.10M	787.50M	934.40M	865.80M
Investing Cash Flow	-987.20M	-731.40M	-593.40M	-639.70M	-555.70M
Financing Cash Flow	358.80M	1.04B	-85.00M	-809.70M	-89.70M

United Utilities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1098.50
• 50DMA: Negative
• 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:UU, the sentiment is Positive. The current price of 1098.5 is below the 20-day moving average (MA) of 1122.95, below the 50-day MA of 1112.60, and above the 200-day MA of 1029.05, indicating a neutral trend. The MACD of -4.46 indicates Positive momentum. The RSI at 47.24 is Neutral, neither overbought nor oversold. The STOCH value of 50.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:UU.

United Utilities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSE	75 Outperform	£20.28B	17.09	12.29%	2.30%	-3.11%	-31.10%
CNA	72 Outperform	£7.40B	6.04	32.10%	3.92%	-24.74%	-63.34%
Sector *	71 Outperform	€12.96B	45.74	11.98%	4.76%	1.44%	6.41%
NG	71 Outperform	£51.22B	17.03	8.35%	5.91%	-7.42%	5.84%
SVT	63 Neutral	£8.02B	34.46	12.73%	5.48%	3.78%	50.18%
UU	62 Neutral	£7.56B	28.30	13.05%	6.24%	10.04%	―
PNN	57 Neutral	£2.31B	―	-4.44%	6.01%	15.42%	-406.43%