United Utilities (GB:UU)
LSE:UU
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United Utilities
(LSE:UU)
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Rating:72Outperform
Price Target:
1,489.00 p
▲(15.52% Upside)
Action:UpgradedDate:12/07/25
United Utilities scores well due to its positive earnings call and strong technical indicators, suggesting stable momentum and growth potential. However, financial performance is hindered by high leverage and negative free cash flow, which are risks that need addressing. The valuation is fair, with an attractive dividend yield providing additional support.
Positive Factors
Regulated monopoly business model
As a regulated monopoly serving the North West, United Utilities benefits from multi-year allowed revenue mechanisms and predictable tariff-setting. This provides durable revenue visibility and recovery of efficient costs and capital through the RCV framework, reducing demand-driven volatility over regulatory cycles.
Negative Factors
High financial leverage
A high debt-to-equity ratio and low equity proportion leave the company exposed to interest rate moves and refinancing risk. Elevated leverage constrains financial flexibility, increasing the cost of capital for large infrastructure projects and reducing buffer to absorb regulatory or environmental-driven investment shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated monopoly business model
As a regulated monopoly serving the North West, United Utilities benefits from multi-year allowed revenue mechanisms and predictable tariff-setting. This provides durable revenue visibility and recovery of efficient costs and capital through the RCV framework, reducing demand-driven volatility over regulatory cycles.
Read all positive factors
United Utilities (UU) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£8.79B
Dividend Yield4.45%
Average Volume (3M)1.91M
Price to Earnings (P/E)8.1
Beta (1Y)0.55
Revenue Growth15.76%
EPS Growth254.82%
CountryUK
Employees6,000
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)0.53
Shares Outstanding681,888,400
10 Day Avg. Volume1,575,852
30 Day Avg. Volume1,906,953
Financial Highlights & Ratios
PEG Ratio-1.53
Price to Book (P/B)3.45
Price to Sales (P/S)3.64
P/FCF Ratio-373.61
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£1,450.00Price Target Upside12.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.01
Revenue Forecast (FY)£2.58B
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 pro...
How the Company Makes Money
United Utilities primarily makes money by operating as a regulated monopoly water and wastewater provider. The main revenue stream is regulated customer charges (billed to households and non-household customers) for water supply and sewerage servi...
United Utilities Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 21, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook for United Utilities, with strong operational achievements and a stable financial position. However, challenges with regulatory ratings and the need for a national social tariff to address affordability were highlighted. The company is proactive in addressing these challenges and exploring growth opportunities through innovation and strategic engagements.Positive Updates
Strong Cash Performance
United Utilities reported a strong cash performance despite increased bills, doubling the number of customers on affordability schemes and maintaining cash flow.
Negative Updates
Disappointment with EPA Rating
The company expressed disappointment with a 2-star EPA rating due to changes in methodology and definitions, including pollution from storms and power interruptions.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Cash Performance
United Utilities reported a strong cash performance despite increased bills, doubling the number of customers on affordability schemes and maintaining cash flow.
Read all positive updates
Company Guidance
In the recent call, United Utilities provided detailed guidance on their fiscal '26 interim results, highlighting several key metrics and future expectations. The company emphasized ongoing conversations with regulators about reopeners in AMP8 and potential growth opportunities, particularly in areas like asset health and data centers. They expect the upcoming white paper to bring recommendations for regulatory changes, with a focus on investor-friendly measures and a strategic policy statement for Ofwat and the EA. The firm is actively managing affordability, having doubled the number of customers on support schemes, and anticipates potential legislative developments like a national social tariff. Financially, United Utilities maintains a strong balance sheet with a net debt to RCV gearing of 60%, well within their 55% to 65% range, and they are confident in their funding for AMP8, despite uncertainties linked to possible reopeners. They also discussed the potential environmental super cycle and the implications of PFAS and housebuilding on future investments, while reaffirming their commitment to transformation projects to manage totex delivery effectively. The company guided for 100 basis points of outperformance, with a focus on financing, ODIs, and PCDs, and while they expect a net penalty in ODIs this year, they are confident in achieving a net reward position over the AMP period. Overall, United Utilities conveyed a positive outlook, emphasizing their preparedness for future regulatory and environmental challenges.United Utilities Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
65
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.37B | 2.15B | 1.95B | 1.82B | 1.81B | 1.86B |
| Gross Profit | 1.61B | 2.00B | 1.66B | 754.10M | 874.30M | 908.40M |
| EBITDA | 1.32B | 1.19B | 992.70M | 1.18B | 1.16B | 1.02B |
| Net Income | 401.60M | 264.70M | 126.90M | 204.90M | 453.40M | 106.80M |
Balance Sheet | ||||||
| Total Assets | 17.53B | 16.77B | 15.65B | 14.53B | 14.18B | 14.04B |
| Cash, Cash Equivalents and Short-Term Investments | 1.94B | 1.67B | 1.40B | 340.40M | 744.10M | 528.10M |
| Total Debt | 11.38B | 10.79B | 10.00B | 8.44B | 8.45B | 8.36B |
| Total Liabilities | 15.54B | 14.77B | 13.60B | 12.02B | 11.15B | 11.08B |
| Stockholders Equity | 1.99B | 2.00B | 2.06B | 2.51B | 3.03B | 2.96B |
Cash Flow | ||||||
| Free Cash Flow | -58.70M | -79.90M | -19.00M | 93.50M | 221.80M | 135.20M |
| Operating Cash Flow | 1.13B | 918.10M | 745.10M | 787.50M | 865.80M | 815.20M |
| Investing Cash Flow | -876.10M | -987.20M | -731.40M | -593.40M | -555.70M | -598.80M |
| Financing Cash Flow | 151.00M | 358.80M | 1.04B | -85.00M | -89.70M | -27.80M |
United Utilities Technical Analysis
Neutral
1289.00
Price Trends
1304.66
Negative
1248.02
Positive
1187.76
Positive
Market Momentum
-11.53
Positive
44.82
Neutral
38.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:UU, the sentiment is Neutral. The current price of 1289 is below the 20-day moving average (MA) of 1323.70, below the 50-day MA of 1304.66, and above the 200-day MA of 1187.76, indicating a neutral trend. The MACD of -11.53 indicates Positive momentum. The RSI at 44.82 is Neutral, neither overbought nor oversold. The STOCH value of 38.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:UU.
United Utilities Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | £61.47B | 21.31 | 7.66% | 4.15% | -9.52% | 35.74% | |
74 Outperform | £29.92B | 16.49 | 7.09% | 2.98% | 1.78% | -50.72% | |
72 Outperform | £8.79B | 8.14 | 20.43% | 4.45% | 15.76% | 254.82% | |
71 Outperform | £9.02B | 8.54 | 17.41% | 4.50% | 10.68% | 35.18% | |
67 Neutral | £2.44B | 9.64 | 3.09% | 6.56% | 19.50% | ― | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
59 Neutral | £9.12B | -112.68 | 1.68% | 2.86% | -4.82% | -123.58% |
* Utilities Sector Average
GB:UU
United Utilities
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.