Pennon Group Plc

BATS-CHIXE:PNNL Stock Report

Market Cap: UK£1.6b

Pennon Group Valuation

Is PNNL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of PNNL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PNNL (£5.63) is trading below our estimate of fair value (£9.06)

Significantly Below Fair Value: PNNL is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PNNL?

Key metric: As PNNL is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for PNNL. This is calculated by dividing PNNL's market cap by their current revenue.
What is PNNL's PS Ratio?
PS Ratio1.8x
SalesUK£906.80m
Market CapUK£1.61b

Price to Sales Ratio vs Peers

How does PNNL's PS Ratio compare to its peers?

The above table shows the PS ratio for PNNL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average2x
SVT Severn Trent
3.5x6.5%UK£8.1b
UU. United Utilities Group
3.6x8.1%UK£7.4b
DRX Drax Group
0.3x-8.6%UK£2.5b
TEP Telecom Plus
0.7x5.4%UK£1.4b
PNNL Pennon Group
1.8x8.9%UK£1.6b

Price-To-Sales vs Peers: PNNL is good value based on its Price-To-Sales Ratio (1.8x) compared to the peer average (2x).

Price to Sales Ratio vs Industry

How does PNNL's PS Ratio compare vs other companies in the Global Water Utilities Industry?

14 CompaniesPrice / SalesEstimated GrowthMarket Cap
No. of Companies14PS01.63.24.86.48+
14 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: PNNL is good value based on its Price-To-Sales Ratio (1.8x) compared to the Global Water Utilities industry average (1.9x).

Price to Sales Ratio vs Fair Ratio

What is PNNL's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PNNL PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1.8x
Fair PS Ratio4.9x

Price-To-Sales vs Fair Ratio: PNNL is good value based on its Price-To-Sales Ratio (1.8x) compared to the estimated Fair Price-To-Sales Ratio (4.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst PNNL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£5.63
UK£7.11
+26.3%
12.2%UK£8.90UK£5.75n/a12
Nov ’25UK£5.44
UK£7.11
+30.8%
11.8%UK£8.90UK£6.00n/a12
Oct ’25UK£6.02
UK£7.40
+23.0%
10.7%UK£8.90UK£6.00n/a12
Sep ’25UK£6.05
UK£7.47
+23.6%
10.2%UK£8.90UK£6.00n/a12
Aug ’25UK£6.25
UK£7.73
+23.6%
11.6%UK£9.55UK£6.00n/a12
Jul ’25UK£5.85
UK£7.68
+31.3%
11.5%UK£9.55UK£6.00n/a12
Jun ’25UK£6.29
UK£7.94
+26.3%
11.6%UK£10.30UK£6.77n/a12
May ’25UK£6.76
UK£8.11
+19.9%
11.9%UK£10.60UK£6.77n/a12
Apr ’25UK£6.47
UK£8.33
+28.8%
11.8%UK£10.60UK£6.77n/a12
Mar ’25UK£6.74
UK£8.33
+23.7%
11.8%UK£10.60UK£6.77n/a12
Feb ’25UK£7.04
UK£8.19
+16.3%
14.4%UK£10.60UK£6.20n/a12
Jan ’25UK£7.56
UK£8.23
+8.9%
14.9%UK£10.90UK£6.20n/a13
Dec ’24UK£7.08
UK£8.12
+14.8%
16.1%UK£10.90UK£6.20n/a12
Nov ’24UK£7.25
UK£8.13
+12.1%
15.9%UK£10.90UK£6.20UK£5.4412
Oct ’24UK£5.95
UK£7.90
+32.7%
16.3%UK£10.90UK£6.20UK£6.0211
Sep ’24UK£6.36
UK£8.91
+40.1%
16.6%UK£12.00UK£7.00UK£6.0511
Aug ’24UK£6.93
UK£9.17
+32.5%
15.4%UK£12.00UK£7.00UK£6.2511
Jul ’24UK£7.12
UK£9.44
+32.6%
15.1%UK£12.00UK£7.00UK£5.8511
Jun ’24UK£7.89
UK£9.67
+22.6%
14.3%UK£12.00UK£7.00UK£6.2910
May ’24UK£8.58
UK£9.70
+13.0%
13.6%UK£12.00UK£7.00UK£6.7611
Apr ’24UK£8.77
UK£9.86
+12.5%
14.7%UK£12.00UK£6.50UK£6.4711
Mar ’24UK£7.99
UK£10.01
+25.3%
15.8%UK£13.00UK£6.50UK£6.7411
Feb ’24UK£9.07
UK£10.01
+10.4%
15.8%UK£13.00UK£6.50UK£7.0411
Jan ’24UK£8.95
UK£10.04
+12.3%
15.7%UK£13.00UK£6.50UK£7.5611
Dec ’23UK£9.33
UK£10.25
+9.8%
16.4%UK£13.00UK£6.50UK£7.0811
Nov ’23UK£8.48
UK£10.48
+23.5%
17.0%UK£13.00UK£6.50UK£7.2512

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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