Pennon Group Plc

LSE:PNN Stock Report

Market Cap: UK£2.3b

Pennon Group Valuation

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

Valuation Score

1/6

Valuation Score 1/6

  • 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 PNN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Discounted Cash Flow
Simply Wall St
UK£4.77
Fair Value
4.1% overvalued intrinsic discount
12
Number of Analysts

Below Fair Value: PNN (£4.97) is trading above our estimate of fair value (£4.77)

Significantly Below Fair Value: PNN is trading above our estimate of fair value.

Key Valuation Metric

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

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

The above table shows the Price to Sales ratio for PNN. This is calculated by dividing PNN's market cap by their current revenue.
What is PNN's PS Ratio?
PS Ratio2.4x
SalesUK£985.40m
Market CapUK£2.34b

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for PNN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average2.1x
SVT Severn Trent
3.5x8.1%UK£8.3b
UU. United Utilities Group
3.7x8.2%UK£7.6b
DRX Drax Group
0.3x-8.1%UK£2.1b
TEP Telecom Plus
0.8x8.1%UK£1.4b
PNN Pennon Group
2.4x7.2%UK£2.3b

Price-To-Sales vs Peers: PNN is expensive based on its Price-To-Sales Ratio (2.4x) compared to the peer average (2.1x).

Price to Sales Ratio vs Industry

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

13 CompaniesPrice / SalesEstimated GrowthMarket Cap
PNN 2.4xIndustry Avg. 2.1xNo. of Companies16PS01.63.24.86.48+
13 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: PNN is expensive based on its Price-To-Sales Ratio (2.4x) compared to the Global Water Utilities industry average (2.2x).

Price to Sales Ratio vs Fair Ratio

What is PNN'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.

PNN PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio2.4x
Fair PS Ratio3.7x

Price-To-Sales vs Fair Ratio: PNN is good value based on its Price-To-Sales Ratio (2.4x) compared to the estimated Fair Price-To-Sales Ratio (3.7x).

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 PNN forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£4.97
UK£5.52
+11.1%
11.0%UK£6.50UK£4.60n/a12
Apr ’26UK£4.57
UK£5.54
+21.1%
11.3%UK£6.50UK£4.60n/a12
Mar ’26UK£4.19
UK£5.66
+35.0%
10.7%UK£6.50UK£4.70n/a12
Feb ’26UK£5.78
UK£6.71
+16.1%
15.9%UK£8.95UK£5.70n/a11
Jan ’26UK£5.94
UK£7.18
+21.0%
12.7%UK£8.95UK£5.75n/a12
Dec ’25UK£6.03
UK£7.14
+18.5%
12.6%UK£9.15UK£5.75n/a12
Nov ’25UK£5.47
UK£7.11
+30.0%
11.8%UK£8.90UK£6.00n/a12
Oct ’25UK£5.98
UK£7.40
+23.8%
10.7%UK£8.90UK£6.00n/a12
Sep ’25UK£6.04
UK£7.47
+23.8%
10.2%UK£8.90UK£6.00n/a12
Aug ’25UK£6.30
UK£7.73
+22.8%
11.6%UK£9.55UK£6.00n/a12
Jul ’25UK£5.85
UK£7.68
+31.4%
11.5%UK£9.55UK£6.00n/a12
Jun ’25UK£6.22
UK£7.94
+27.7%
11.6%UK£10.30UK£6.77n/a12
May ’25UK£6.77
UK£8.11
+19.8%
11.9%UK£10.60UK£6.77n/a12
Apr ’25UK£6.48
UK£8.33
+28.6%
11.8%UK£10.60UK£6.77UK£4.5712
Mar ’25UK£6.71
UK£8.33
+24.1%
11.8%UK£10.60UK£6.77UK£4.1912
Feb ’25UK£7.04
UK£8.19
+16.3%
14.4%UK£10.60UK£6.20UK£5.7812
Jan ’25UK£7.52
UK£8.23
+9.5%
14.9%UK£10.90UK£6.20UK£5.9413
Dec ’24UK£7.07
UK£8.12
+14.9%
16.1%UK£10.90UK£6.20UK£6.0312
Nov ’24UK£7.26
UK£8.13
+11.9%
15.9%UK£10.90UK£6.20UK£5.4712
Oct ’24UK£5.86
UK£7.90
+34.7%
16.3%UK£10.90UK£6.20UK£5.9811
Sep ’24UK£6.37
UK£8.91
+39.9%
16.6%UK£12.00UK£7.00UK£6.0411
Aug ’24UK£6.88
UK£9.17
+33.3%
15.4%UK£12.00UK£7.00UK£6.3011
Jul ’24UK£7.11
UK£9.44
+32.7%
15.1%UK£12.00UK£7.00UK£5.8511
Jun ’24UK£7.83
UK£9.67
+23.5%
14.3%UK£12.00UK£7.00UK£6.2210
May ’24UK£8.60
UK£9.70
+12.7%
13.6%UK£12.00UK£7.00UK£6.7711
Apr ’24UK£8.74
UK£9.86
+12.9%
14.7%UK£12.00UK£6.50UK£6.4811
AnalystConsensusTarget
Consensus Narrative from 12 Analysts
UK£5.52
Fair Value
10.0% undervalued intrinsic discount
12
Number of Analysts

Analyst Forecast: Target price is less than 20% higher than the current share price.

Discover undervalued companies

7D

1Y

7D

1Y

7D

1Y

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/04/22 08:29
End of Day Share Price 2025/04/22 00:00
Earnings2024/09/30
Annual Earnings2024/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Pennon Group Plc is covered by 30 analysts. 11 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Dominic NashBarclays
John MuskBarclays
Thomas MartinBNP Paribas Exane