Severn Trent (SVT) AI Stock Analysis

• Market Cap: £7.64B
• Dividend Yield: 4.8%
• Average Volume (3M): 432.31K
• Price to Earnings (P/E): 33.1
• Beta (1Y): 0.46
• Revenue Growth: 3.78%
• EPS Growth: 50.18%
• Country: UK
• Employees: 7,040
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.54
• Shares Outstanding: 301,030,550
• 10 Day Avg. Volume: 473,679
• 30 Day Avg. Volume: 432,313
• PEG Ratio: 0.66
• Price to Book (P/B): 4.33
• Price to Sales (P/S): 3.16
• P/FCF Ratio: -11.27
• 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: £3,022.89
• Price Target Upside: 19.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 60 Neutral
• Price Target: 2,720.00p ▲(7.17% Upside)

Severn Trent's overall stock score is primarily influenced by its strong revenue growth and operating margins. However, high leverage and negative free cash flow are significant risks. The technical indicators suggest bearish momentum, and the valuation appears stretched, though the dividend yield offers some appeal.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective service delivery, enhancing long-term business stability and potential for expansion.

Operating Margins

High operating margins reflect efficient operations and cost management, contributing to sustained profitability and competitive advantage in the regulated water industry.

Cash Generation

Strong operating cash flow generation supports financial flexibility, enabling investment in infrastructure and innovation, crucial for long-term growth and resilience.

Negative Factors

High Leverage

High leverage can strain financial resources and limit strategic options, posing risks during economic downturns or regulatory changes, impacting long-term stability.

Negative Free Cash Flow

Negative free cash flow indicates potential liquidity challenges, limiting the company's ability to fund new projects or respond to unforeseen expenses, affecting long-term growth.

Low Equity Ratio

A low equity ratio highlights dependency on debt, increasing vulnerability to interest rate hikes and economic fluctuations, potentially impacting financial health.

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 generates revenue primarily through the provision of water and wastewater services to residential, commercial, and industrial customers. The company operates under a regulated framework, where its pricing is determined by periodic reviews conducted by the water regulator, Ofwat, ensuring that it can recover its costs and earn a reasonable return on investment. Key revenue streams include fixed charges for water supply, usage-based charges, and charges for sewerage and wastewater treatment services. Additionally, Severn Trent benefits from long-term contracts and partnerships with local authorities and businesses, further stabilizing its revenue base. The company also invests in infrastructure projects and innovative technologies, which can create new revenue opportunities and improve operational efficiencies.

Severn Trent Financial Statement Overview

Summary

Severn Trent shows robust 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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.43B	2.43B	2.34B	2.17B	1.94B	1.83B
Gross Profit	624.90M	2.23B	536.60M	1.27B	1.17B	1.10B
EBITDA	1.03B	1.16B	886.70M	1.03B	997.40M	891.50M
Net Income	229.40M	229.40M	140.20M	132.20M	-87.20M	212.20M
Balance Sheet
Total Assets	15.91B	15.91B	14.20B	12.24B	11.59B	11.09B
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.02B	953.20M	34.20M	115.40M	56.20M
Total Debt	9.70B	9.70B	8.27B	7.30B	6.73B	6.62B
Total Liabilities	14.14B	14.14B	12.37B	11.27B	10.33B	9.95B
Stockholders Equity	1.77B	1.77B	1.83B	970.60M	1.26B	1.14B
Cash Flow
Free Cash Flow	-640.70M	-680.50M	-356.40M	-190.20M	62.90M	60.00M
Operating Cash Flow	912.30M	912.30M	813.30M	549.50M	709.50M	696.60M
Investing Cash Flow	-1.54B	-1.54B	-1.19B	-721.70M	-650.10M	-634.90M
Financing Cash Flow	718.60M	718.60M	1.30B	93.20M	4.30M	-66.30M

Severn Trent Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2538.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 2538 is below the 20-day moving average (MA) of 2556.55, below the 50-day MA of 2610.78, and below the 200-day MA of 2544.88, indicating a bearish trend. The MACD of -17.56 indicates Negative momentum. The RSI at 43.49 is Neutral, neither overbought nor oversold. The STOCH value of 35.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SVT.

Severn Trent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEP	77 Outperform	511.12M	7.55	12.25%	2.90%	16.42%	33.12%
NG	72 Outperform	51.35B	16.79	7.68%	4.51%	-7.42%	5.84%
SSE	69 Neutral	18.36B	15.41	9.86%	3.85%	-3.11%	-31.10%
UU	61 Neutral	7.74B	29.24	13.24%	4.57%	10.04%	0.00%
SVT	60 Neutral	£7.64B	33.14	12.73%	4.80%	3.78%	50.18%
PNN	58 Neutral	2.16B	-32.27	-4.00%	7.46%	15.42%	-406.43%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Severn Trent Corporate Events

Severn Trent Plc Updates on Voting Rights and Capital Structure

Severn Trent Plc announced that as of August 31, 2025, its issued share capital consists of 303,249,165 ordinary shares with voting rights, while holding 2,218,618 shares in Treasury. This results in a total of 301,030,547 voting rights, which shareholders can use to determine their interest in the company under the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:SVT) stock is a Buy with a £33.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Announces Internal Share Transfer by PDMR

Severn Trent Plc announced a transaction involving the transfer of ordinary shares by Neil Morrison, a person discharging managerial responsibility (PDMR), to Laurence Morrison, his spouse. This transaction, which involved 4,671 shares at no cost, was conducted outside a trading venue and reflects internal shareholding adjustments within the company. Such transactions are part of routine compliance with UK Market Abuse Regulations, ensuring transparency and accountability in the company’s operations.

The most recent analyst rating on (GB:SVT) stock is a Hold with a £29.60 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Updates Share Capital and Voting Rights

Severn Trent Plc announced that as of July 31, 2025, its issued share capital comprises 303,234,019 ordinary shares, with 301,015,401 shares having voting rights after accounting for treasury shares. This update is crucial for shareholders to determine their reporting obligations under the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:SVT) stock is a Buy with a £30.50 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.

Severn Trent Announces Vesting of Shares Under LTIP 2021

Severn Trent Plc announced the vesting of shares under its Long Term Incentive Plan (LTIP) 2021, with directors and persons discharging managerial responsibilities receiving shares for nil consideration. These shares were awarded based on the company’s performance, particularly its upper quartile return on regulatory equity compared to other water and sewerage companies. The announcement reflects Severn Trent’s strong operational performance and its commitment to rewarding its leadership team, potentially boosting stakeholder confidence in its strategic direction.

The most recent analyst rating on (GB:SVT) stock is a Hold with a £2830.00 price target. To see the full list of analyst forecasts on Severn Trent stock, see the GB:SVT Stock Forecast page.