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Severn Trent
(LSE:SVT)
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Rating:62Neutral
Price Target:
3,341.00 p
▲(7.77% Upside)
Action:Reiterated
Date:08/26/26
The score is held back primarily by balance-sheet and cash-flow risk (high leverage and deeply negative free cash flow), despite solid operating performance. Offsetting this are constructive technicals (price above major moving averages with positive momentum) and a positive earnings-call update (upgraded FY‑28 EPS guidance, strong ODI delivery, and efficiency/financing execution). Valuation is somewhat demanding (P/E ~25.2) but supported by a ~4.0% dividend yield.
Positive Factors
Resilient regulated earnings growth
The regulated water and wastewater model supports recurring demand and revenue visibility. FY2026 revenue and profit improvement indicates operating leverage and stronger earnings capacity, although future results remain influenced by regulatory performance incentives.
Negative Factors
High financial leverage
Heavy leverage leaves a relatively small equity cushion if operating performance or regulatory outcomes weaken. It also increases exposure to refinancing costs and restricts financial flexibility while Severn Trent funds a large infrastructure program.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient regulated earnings growth
The regulated water and wastewater model supports recurring demand and revenue visibility. FY2026 revenue and profit improvement indicates operating leverage and stronger earnings capacity, although future results remain influenced by regulatory performance incentives.
Read all positive factors
Severn Trent (SVT) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£8.84B
Dividend Yield4.33%
Average Volume (3M)511.93K
Price to Earnings (P/E)23.5
Beta (1Y)0.82
Revenue Growth16.66%
EPS Growth61.25%
CountryUK
Employees11,544
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)1.24
Shares Outstanding302,060,640
10 Day Avg. Volume594,844
30 Day Avg. Volume511,932
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)5.04
Price to Sales (P/S)3.28
P/FCF Ratio-9.55
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£3,335.00Price Target Upside7.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.04
Revenue Forecast (FY)£3.13B
Severn Trent Business Overview & Revenue Model
Company Description
Severn Trent PLC provides water and wastewater services in the United Kingdom. It operates in two segments, Regulated Water and Wastewater, and Business Services. The company offers water and wastewater services to approximately 4.7 million househ...
How the Company Makes Money
Severn Trent makes money primarily through its regulated water and wastewater utility activities. The largest share of revenue comes from charges billed to households and businesses for (1) supplying potable water and (2) collecting and treating w...
Severn Trent Earnings Call Summary
Earnings Call Date:May 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The call presented multiple operational and financial strengths: strong ODI outperformance (GBP 73m), significant efficiency programs (GBP 500m capital and GBP 150m opex), robust financing (GBP 1.8bn raised at tight spreads), AI and digital deployment at scale, and upgraded FY28 EPS guidance (at least 250p). Key challenges remain around customer experience (C-Mex) penalties (~GBP 28m), unresolved Ofwat/EA investigations and pollution incidents, some regulatory uncertainty around in-period funding for growth, and political/sector volatility. On balance the positive operational delivery, financial execution and clear efficiency programs materially outweigh the notable challenges.Positive Updates
Reopener Investment Submission — GBP 600 million
Submitted proposals totaling ~GBP 600 million to unlock asset health and growth investment (distribution service reservoirs, sewers, boreholes, growth). Aiming to secure in-period funding based on customer support and delivery progress.
Negative Updates
Customer Experience (C-Mex) Underperformance
Customer experience metric (C-Mex) underperformed this year, resulting in an approximate GBP 28 million penalty; management acknowledged the need for significant improvement in customer-facing journeys and keeping customers informed (KCI).
Read all updates
Q4-2026 Updates
Positive
Negative
Reopener Investment Submission — GBP 600 million
Submitted proposals totaling ~GBP 600 million to unlock asset health and growth investment (distribution service reservoirs, sewers, boreholes, growth). Aiming to secure in-period funding based on customer support and delivery progress.
Read all positive updates
Company Guidance
Management upgraded FY‑28 EPS guidance to at least 250p, citing a strong exit driven by £73m of ODI outperformance (78% of ODI metrics green; since 2021 ODI upside ~£0.5bn) and a range of cost and financing gains: lower‑end operating costs, £36m of efficiencies delivered in FY26 and a new £150m operating‑cost efficiency target plus £500m capital efficiency. They submitted ~£600m of reopener cases (including a distribution service reservoirs case with £221m proposed to renew 2% of DSRs within a £479m case, a sewers case asking for £175m to renew 172km of a 93,000km network with AI inspections of ~10,000km, a £25m borehole program to renew 11% of boreholes, and ~£50m of additional STW growth investment across 8 catchments on top of the £700m PR24 growth allowance), have engaged 2,150 customers on in‑period funding (supporting ~£8 of bills by 2030), and reaffirmed no further equity issuance this AMP (gearing guidance 60–65% by 2030). Other operational metrics supporting guidance include leakage down 8% YoY, pollutions down ~33%, spills down 41%, floodings down 12%, D‑Mex and biodiversity caps met, 600,000 smart meters installed, a new Derby WTW adding 89 ML/day, £1.8bn of debt raised this year at tight spreads, and continued confidence in sustaining top EPA performance.Severn Trent Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
46
Neutral
Cash Flow
38
Negative
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.83B | 2.43B | 2.34B | 2.17B | 1.94B |
| Gross Profit | 1.71B | 2.23B | 536.60M | 1.27B | 1.17B |
| EBITDA | 1.45B | 1.16B | 886.70M | 1.03B | 997.40M |
| Net Income | 371.00M | 229.40M | 140.20M | 132.20M | -87.20M |
Balance Sheet | |||||
| Total Assets | 17.57B | 15.91B | 14.20B | 12.24B | 11.59B |
| Cash, Cash Equivalents and Short-Term Investments | 796.00M | 1.02B | 953.20M | 34.20M | 115.40M |
| Total Debt | 10.98B | 9.70B | 8.27B | 7.30B | 6.73B |
| Total Liabilities | 15.73B | 14.14B | 12.37B | 11.27B | 10.33B |
| Stockholders Equity | 1.84B | 1.77B | 1.83B | 970.60M | 1.26B |
Cash Flow | |||||
| Free Cash Flow | -972.00M | -680.50M | -356.40M | -190.20M | 62.90M |
| Operating Cash Flow | 924.00M | 912.30M | 813.30M | 549.50M | 709.50M |
| Investing Cash Flow | -1.95B | -1.54B | -1.19B | -721.70M | -650.10M |
| Financing Cash Flow | 771.00M | 718.60M | 1.30B | 93.20M | 4.30M |
Severn Trent Technical Analysis
Negative
3100.00
Price Trends
3036.28
Negative
3008.13
Negative
2954.84
Negative
Market Momentum
-33.02
Positive
33.59
Neutral
3.24
Positive
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 3100 is above the 20-day moving average (MA) of 3050.00, above the 50-day MA of 3036.28, and above the 200-day MA of 2954.84, indicating a bearish trend. The MACD of -33.02 indicates Positive momentum. The RSI at 33.59 is Neutral, neither overbought nor oversold. The STOCH value of 3.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SVT.
Severn Trent Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | £57.13B | 17.10 | 8.47% | 4.30% | -3.76% | 8.20% | |
67 Neutral | £6.85B | 9.46 | 21.92% | 3.76% | 0.27% | ― | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | £9.85B | 15.37 | 27.72% | 4.06% | 21.96% | 121.69% | |
62 Neutral | £8.84B | 23.48 | 20.35% | 4.33% | 16.66% | 61.25% | |
60 Neutral | £28.77B | 23.18 | 9.45% | 2.91% | 0.54% | -2.65% | |
48 Neutral | £2.11B | 23.21 | 6.61% | 8.62% | 23.25% | ― |
* Utilities Sector Average
GB:SVT
Severn Trent
2,930.00
460.01
18.62%
GB:CNA
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150.90
-2.99
-1.94%
GB:PNN
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449.40
6.16
1.39%
GB:SSE
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2,362.00
739.46
45.57%
GB:UU
United Utilities
1,324.00
224.08
20.37%
GB:NG
National Grid
1,130.50
122.99
12.21%
Severn Trent Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Severn Trent Updates Market on Total Voting Rights and Share Capital
Positive
Aug 3, 2026
Severn Trent has confirmed that, as of 31 July 2026, its issued share capital comprises 304,044,266 ordinary shares, of which 2,002,453 are held in treasury, resulting in 302,041,813 voting rights. This updated voting rights figure provides the ma...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Severn Trent LTIP Vests at 90% as Utility Hits Upper-Quartile Returns
Positive
Jul 28, 2026
Severn Trent has transferred treasury shares to directors and other senior managers following the vesting of conditional awards under its 2023 long-term incentive plan, with part of the holdings sold to cover tax liabilities and the balance retain...
Business Operations and StrategyExecutive/Board Changes
Severn Trent Grants Performance-Linked Share Awards to Executive Directors
Positive
Jul 16, 2026
Severn Trent has granted awards over 177,448 ordinary shares to executive directors James Jesic and Helen Miles under its 2021 Long Term Incentive Plan, in line with the remuneration policy approved at the 2026 annual meeting. The awards, which ca...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Severn Trent Launches €14 Billion Euro Medium Term Note Programme
Positive
Jul 16, 2026
Severn Trent has published a Financial Conduct Authority-approved prospectus for a €14 billion Euro Medium Term Note Programme, with Severn Trent Plc and Severn Trent Utilities Finance Plc as issuers and Severn Trent Water Limited acting as ...
Business Operations and StrategyStock BuybackDividendsShareholder Meetings
Severn Trent Wins Strong Shareholder Backing at 2026 AGM
Positive
Jul 9, 2026
Severn Trent shareholders backed all 22 resolutions at the 2026 annual general meeting, including the receipt of the annual report, the directors’ remuneration report and policy, and a final dividend for the year to 31 March 2026. Investors ...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Severn Trent Steps Up FY27 Investment as Liquidity Backed by Larger Bank Facilities
Positive
Jul 9, 2026
Severn Trent reported a strong start to its 2027 financial year, with operational and financial performance in line with expectations and confidence in achieving at least £50 million in performance incentives. The company is accelerating its ...
Business Operations and StrategyLegal ProceedingsRegulatory Filings and Compliance
Ofwat Ends Severn Trent Wastewater Probe Without Fine
Positive
Jul 8, 2026
U.K. regulator Ofwat has closed its sector-wide wastewater investigation into Severn Trent Water without imposing a financial penalty, citing the company’s response to breaches as setting a standard for the industry. Severn Trent accepted th...
Business Operations and StrategyExecutive/Board Changes
Severn Trent grants new long-term incentive share awards to senior managers
Neutral
Jul 1, 2026
Severn Trent has granted awards over 224,703 ordinary shares under its 2021 Long Term Incentive Plan, including 90,000 shares allocated to directors and persons discharging managerial responsibilities. The awards, which carry no upfront cost and a...
Business Operations and StrategyRegulatory Filings and Compliance
Severn Trent Updates Market on Share Capital and Voting Rights
Neutral
Jul 1, 2026
Severn Trent has confirmed that as of 30 June 2026 its issued share capital comprises 304,015,716 ordinary shares, of which 2,218,618 are held in treasury, leaving 301,797,098 voting rights in circulation. This disclosure updates investors on the ...
Executive/Board ChangesRegulatory Filings and Compliance
Severn Trent Executives Receive Vested Shares Under 2023 Bonus Scheme
Neutral
Jun 16, 2026
Severn Trent has disclosed that two executive directors and several senior managers have received vested shares under the company’s 2023 Annual Bonus Scheme, with transfers made into nominee CREST accounts or an employee share trust at nil c...
Executive/Board ChangesRegulatory Filings and Compliance
Severn Trent Director Sharmila Nebhrajani Takes Non-Executive Role at Essentra
Neutral
Jun 16, 2026
Severn Trent has announced that non-executive director Sharmila Nebhrajani OBE will join Essentra plc as an independent non-executive director from 29 June 2026. The company confirmed the move under UK Listing Rule 6.4.9(R) and said there is no ad...
Financial DisclosuresRegulatory Filings and ComplianceShareholder Meetings
Severn Trent Publishes 2026 Annual Report and Sets Date for AGM
Neutral
Jun 8, 2026
Severn Trent has published its Annual Report for the year ended 31 March 2026 and the Notice of its 2026 Annual General Meeting, making both documents available on its investor website. In line with UK Listing Rules and FCA disclosure requirements...
Executive/Board ChangesRegulatory Filings and Compliance
Severn Trent Grants Deferred Bonus Share Awards to Director and Senior Managers
Neutral
Jun 5, 2026
Severn Trent has granted deferred bonus share awards to one director and several senior managers under its Annual Bonus Scheme for the year to 31 March 2026, with awards ranging from hundreds to several thousand ordinary shares. The shares, awarde...
Regulatory Filings and Compliance
Severn Trent Updates Share Capital and Voting Rights Figures
Neutral
Jun 1, 2026
Severn Trent has confirmed that as of 31 May 2026 its issued share capital comprises 303,969,196 ordinary shares, of which 2,218,618 are held in treasury, leaving 301,750,578 voting rights in issue. The updated voting rights figure provides the ke...
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.