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Severn Trent (SVT) AI Stock Analysis
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Severn Trent
(LSE:SVT)
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.
Severn Trent (SVT) vs. iShares MSCI United Kingdom ETF (EWC)
- Market Cap
- GBP 9.99B
- Dividend Yield
- 3.81%
- Average Volume (3M)
- 596.96K
- Price to Earnings (P/E)
- 26.7
- Beta (1Y)
- 0.75
- Revenue Growth
- 16.66%
- EPS Growth
- 61.25%
- Country
- UK
- Employees
- 11,544
- Sector
- Utilities
- Sector Strength
- 66
- Industry
- Regulated Water
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 household...
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 wast...
Severn Trent Earnings Call Summary
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.
Q4-2026 Updates
Positive Updates
Negative 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
Operations are resilient with steady revenue growth and improved FY2026 profitability (net income up to £371m and margin ~13.1%). However, the overall financial quality is constrained by very high leverage (debt/equity roughly ~4.5x–~7.5x; total debt ~£11.0bn) and persistently negative, worsening free cash flow (about -£972m in FY2026), implying continued reliance on external funding.
Income Statement
74PositiveBalance Sheet
46NeutralCash Flow
38Negative| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.83B | 2.83B | 2.43B | 2.34B | 2.17B | 1.94B |
| Gross Profit | 861.30M | 1.71B | 2.23B | 536.60M | 1.27B | 1.17B |
| EBITDA | 1.44B | 1.45B | 1.16B | 924.20M | 1.03B | 997.40M |
| Net Income | 371.00M | 371.00M | 229.40M | 140.20M | 132.20M | -87.20M |
Balance Sheet | ||||||
| Total Assets | 17.57B | 17.57B | 15.91B | 14.20B | 12.24B | 11.59B |
| Cash, Cash Equivalents and Short-Term Investments | 796.00M | 796.00M | 1.02B | 953.20M | 34.20M | 115.40M |
| Total Debt | 10.98B | 10.98B | 9.70B | 8.27B | 7.30B | 6.73B |
| Total Liabilities | 15.73B | 15.73B | 14.14B | 12.37B | 11.27B | 10.33B |
| Stockholders Equity | 1.84B | 1.84B | 1.77B | 1.83B | 970.60M | 1.26B |
Cash Flow | ||||||
| Free Cash Flow | -972.00M | -972.00M | -680.50M | -356.40M | -190.20M | 62.90M |
| Operating Cash Flow | 924.00M | 924.00M | 912.30M | 813.30M | 549.50M | 709.50M |
| Investing Cash Flow | -1.95B | -1.95B | -1.54B | -1.19B | -721.70M | -650.10M |
| Financing Cash Flow | 771.00M | 771.00M | 718.60M | 1.30B | 93.20M | 4.30M |
Severn Trent Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SVT, the sentiment is Positive. The current price of 3306.00 is above the 20-day moving average (MA) of 3183.00, above the 50-day MA of 3098.00, and above the 200-day MA of 3027.60, indicating a bullish trend. The MACD of 54.31 indicates Negative momentum. The RSI at 69.90 is Neutral, neither overbought nor oversold. The STOCH value of 86.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SVT.
Severn Trent Peers Comparison
Overall Rating
GB:UU65Neutral- GB:SVT62Neutral
GB:CNA59Neutral
GB:NG59Neutral
GB:SSE53Neutral
GB:PNN47Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| Sector * | 66Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% |
| GB:UU | 65Neutral | GBP 11.40B | 17.84 | 27.72% | 3.50% | 21.96% | 121.69% |
| GB:SVT | 62Neutral | GBP 9.99B | 26.66 | 20.35% | 3.81% | 16.66% | 61.25% |
| GB:CNA | 59Neutral | GBP 6.92B | 9.57 | 21.92% | 3.71% | 0.27% | ― |
| GB:NG | 59Neutral | GBP 63.06B | 19.01 | 8.47% | 3.87% | -3.76% | 8.20% |
| GB:SSE | 53Neutral | GBP 31.89B | 25.75 | 9.45% | 2.62% | 0.54% | -2.65% |
| GB:PNN | 47Neutral | GBP 2.40B | 18.03 | 6.61% | 9.54% | 23.25% | ― |
* Utilities Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| GB:SVT | Severn Trent | 3306.00 | 673.07 | 25.56% | |
| GB:CNA | Centrica plc | 152.70 | -21.99 | -12.59% | |
| GB:PNN | Pennon Group plc | 347.40 | -82.94 | -19.27% | |
| GB:SSE | Sse Plc (UK) | 2627.00 | 779.95 | 42.23% | |
| GB:UU | United Utilities (Uk) | 1534.00 | 394.78 | 34.65% | |
| GB:NG | National Grid (Uk) | 1254.50 | 164.35 | 15.08% |
Severn Trent Corporate Events
Severn Trent Updates Market on Total Voting Rights and Share Capital
PositiveSevern 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 marke...
Severn Trent LTIP Vests at 90% as Utility Hits Upper-Quartile Returns
PositiveSevern 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 retained...
Severn Trent Grants Performance-Linked Share Awards to Executive Directors
PositiveSevern 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 carry...
Severn Trent Launches €14 Billion Euro Medium Term Note Programme
PositiveSevern 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 gua...
Severn Trent Wins Strong Shareholder Backing at 2026 AGM
PositiveSevern 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 als...
Severn Trent Steps Up FY27 Investment as Liquidity Backed by Larger Bank Facilities
PositiveSevern 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 cap...
Ofwat Ends Severn Trent Wastewater Probe Without Fine
PositiveU.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 the i...
Severn Trent grants new long-term incentive share awards to senior managers
NeutralSevern 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 are...
Severn Trent Updates Market on Share Capital and Voting Rights
NeutralSevern 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 com...
Severn Trent Executives Receive Vested Shares Under 2023 Bonus Scheme
NeutralSevern 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 cost...
Severn Trent Director Sharmila Nebhrajani Takes Non-Executive Role at Essentra
NeutralSevern 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 addit...
Severn Trent Publishes 2026 Annual Report and Sets Date for AGM
NeutralSevern 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, t...
Severn Trent Grants Deferred Bonus Share Awards to Director and Senior Managers
NeutralSevern 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, awarded a...
Severn Trent Updates Share Capital and Voting Rights Figures
NeutralSevern 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 key d...
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: Aug 26, 2026