Severn Trent (LON:SVT) Posts Earnings Results

Severn Trent (LON:SVT) released its quarterly earnings results on Wednesday. The company reported GBX 179.80 earnings per share (EPS) for the quarter, Digital Look Earnings reports. The business had revenue of GBX 283.10 billion during the quarter. Severn Trent had a return on equity of 17.64% and a net margin of 11.92%.

Here are the key takeaways from Severn Trent’s conference call:

• Severn Trent reported a strong year of operating and financial performance, with PBIT up 46% to GBP 861 million and adjusted EPS up 64.5%, driven by regulated revenue growth, acquisitions, and efficiencies.
• The company upgraded its 2028 earnings guidance to at least GBP 2.50 from GBP 2.24, reflecting confidence in its outlook and continued execution against its investment plan.
• Management highlighted record investment and asset growth, with the regulatory asset base rising 13% to GBP 15.4 billion and a plan to grow it further to GBP 17.4 billion next year before reopeners.
• The company emphasized its environmental and operational outperformance, including lower spills and pollution, all-time low leakage, and a seventh straight year on track for EPA 4-star status.
• Severn Trent said it has a strong balance sheet and financing position, including liquidity through at least August 2027, regulated gearing at 63.6%, and 90% hedged energy needs for the next three years.

Severn Trent Trading Up 1.8%

Shares of LON:SVT opened at GBX 3,066 on Wednesday. The stock has a 50 day moving average of GBX 3,112.09 and a 200 day moving average of GBX 2,965.35. The company has a market cap of £9.23 billion, a PE ratio of 29.26, a price-to-earnings-growth ratio of 4.69 and a beta of 0.56. The company has a current ratio of 1.43, a quick ratio of 0.73 and a debt-to-equity ratio of 601.64. Severn Trent has a 12-month low of GBX 2,381 and a 12-month high of GBX 3,335.

Analyst Upgrades and Downgrades

A number of research firms have issued reports on SVT. UBS Group restated a “sell” rating and set a GBX 2,700 price target on shares of Severn Trent in a research note on Monday. JPMorgan Chase & Co. boosted their price objective on Severn Trent from GBX 2,975 to GBX 3,225 and gave the company a “neutral” rating in a research note on Monday, April 13th. Six investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Reduce” and an average target price of GBX 2,938.43.

Severn Trent Company Profile

As one of Britain’s largest water companies, we supply fresh, clean drinking water to over nine million people across our region – around two billion litres every day. Once used, we collect, clean, and treat the water before safely returning it to the environment. We are one of only three listed water stocks in the UK, offering a valuable combination of reliable earnings, long-term asset growth, and inflation-linked dividends. The UK’s regulatory model provides a high degree of certainty over five-year periods.