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United Utilities (Uk) (GB:UU)
:UU
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United Utilities (UU) AI Stock Analysis

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GB:UU

United Utilities

(LSE:UU)

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Neutral 61 (OpenAI - 4o)
Rating:61Neutral
Price Target:
1,183.00p
▲(2.56% Upside)
United Utilities' overall stock score reflects solid revenue growth and cost management, but is tempered by high leverage and negative free cash flow. Technical indicators suggest limited short-term price movement, and valuation metrics indicate potential overvaluation despite a decent dividend yield.
Positive Factors
Revenue Growth
A 10% revenue growth indicates strong demand for services and effective pricing strategies, supporting long-term business expansion and stability.
Cost Management
Maintaining a high gross profit margin shows effective cost control, which can lead to improved profitability and competitive pricing power.
Cash Generation
Strong operating cash flow relative to net income suggests the company efficiently converts sales into cash, supporting reinvestment and debt servicing.
Negative Factors
High Leverage
High leverage can increase financial risk, limit flexibility in downturns, and lead to higher interest expenses, impacting long-term financial health.
Negative Free Cash Flow
Negative free cash flow suggests potential liquidity issues, limiting the company's ability to fund operations, pay dividends, or reduce debt.
Modest Net Profit Margin
A modest net profit margin indicates limited profitability, which could affect the company's ability to reinvest in growth and compete effectively.

United Utilities (UU) vs. iShares MSCI United Kingdom ETF (EWC)

United Utilities Business Overview & Revenue Model

Company DescriptionUnited 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 MoneyUnited Utilities generates revenue primarily through the provision of water and wastewater services to its residential and commercial customers. The company's revenue model is largely based on regulated tariffs set by Ofwat, the economic regulator for the water sector in England and Wales. Key revenue streams include charges for water supply, sewage services, and infrastructure development. Additionally, UU earns revenue from non-regulated activities such as consultancy services, environmental projects, and partnerships with other organizations, which can provide supplementary income. The company's financial performance is also influenced by investments in infrastructure improvements, operational efficiencies, and customer service enhancements, which can lead to increased customer satisfaction and reduced operational costs.

United Utilities Financial Statement Overview

Summary
United Utilities demonstrates solid revenue growth and efficient cost management, but the high leverage and negative free cash flow pose potential risks. The company needs to focus on improving profitability and managing debt levels to enhance financial stability.
Income Statement
75
Positive
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
65
Positive
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
60
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.15B2.15B1.95B1.82B1.86B1.81B
Gross Profit1.95B2.00B1.66B754.10M884.30M874.30M
EBITDA1.10B1.19B992.70M1.18B1.19B1.16B
Net Income264.70M264.70M126.90M204.90M-56.80M453.40M
Balance Sheet
Total Assets16.77B16.77B15.65B14.53B14.44B14.18B
Cash, Cash Equivalents and Short-Term Investments1.67B1.67B1.40B340.40M240.90M744.10M
Total Debt10.79B10.79B10.00B8.44B7.98B8.45B
Total Liabilities14.77B14.77B13.60B12.02B11.48B11.15B
Stockholders Equity2.00B2.00B2.06B2.51B2.96B3.03B
Cash Flow
Free Cash Flow-70.40M-79.90M-19.00M93.50M305.90M221.80M
Operating Cash Flow918.10M918.10M745.10M787.50M934.40M865.80M
Investing Cash Flow-987.20M-987.20M-731.40M-593.40M-639.70M-555.70M
Financing Cash Flow358.80M358.80M1.04B-85.00M-809.70M-89.70M

United Utilities Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1153.50
Price Trends
50DMA
1137.10
Positive
100DMA
1130.06
Positive
200DMA
1060.62
Positive
Market Momentum
MACD
5.06
Negative
RSI
57.17
Neutral
STOCH
89.08
Negative
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 1153.5 is above the 20-day moving average (MA) of 1139.45, above the 50-day MA of 1137.10, and above the 200-day MA of 1060.62, indicating a bullish trend. The MACD of 5.06 indicates Negative momentum. The RSI at 57.17 is Neutral, neither overbought nor oversold. The STOCH value of 89.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:UU.

United Utilities Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
£54.20B17.728.35%4.28%-7.42%5.84%
71
Outperform
£19.51B16.3712.29%3.60%-3.11%-31.10%
66
Neutral
$17.65B18.105.60%3.62%6.62%11.55%
61
Neutral
£7.90B29.8413.05%4.50%10.04%108.60%
60
Neutral
£7.87B34.1412.73%4.67%3.78%50.18%
59
Neutral
£2.26B-4.44%7.15%15.42%-406.43%
52
Neutral
£7.90B6.18-5.95%2.84%-4.82%-123.58%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:UU
United Utilities
1,166.00
186.88
19.09%
GB:CNA
Centrica
169.80
53.13
45.54%
GB:PNN
Pennon Group plc
477.00
73.00
18.07%
GB:SVT
Severn Trent
2,634.00
232.64
9.69%
GB:SSE
SSE
1,817.00
54.69
3.10%
GB:NG
National Grid
1,091.00
139.87
14.71%
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.Date of analysis: Sep 30, 2025