United Utilities Group PLC

LSE:UU. Stock Report

Market Cap: UK£7.4b

United Utilities Group Valuation

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

Valuation Score

0/6

Valuation Score 0/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

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

Below Fair Value: UU. (£10.85) is trading above our estimate of fair value (£3.67)

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

Key Valuation Metric

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

Key metric: As UU. is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for UU.. This is calculated by dividing UU.'s market cap by their current earnings.
What is UU.'s PE Ratio?
PE Ratio65.4x
EarningsUK£113.20m
Market CapUK£7.40b

Price to Earnings Ratio vs Peers

How does UU.'s PE Ratio compare to its peers?

The above table shows the PE ratio for UU. vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average19.2x
SVT Severn Trent
57.6x23.2%UK£8.1b
CNA Centrica
5.6x-11.2%UK£6.2b
SSE SSE
9.9x5.1%UK£18.8b
DRX Drax Group
3.8x-25.6%UK£2.5b
UU. United Utilities Group
65.4x26.1%UK£7.4b

Price-To-Earnings vs Peers: UU. is expensive based on its Price-To-Earnings Ratio (65.4x) compared to the peer average (19.2x).

Price to Earnings Ratio vs Industry

How does UU.'s PE Ratio compare vs other companies in the Global Water Utilities Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
UU. 65.4xIndustry Avg. 17.9xNo. of Companies10PE01224364860+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: UU. is expensive based on its Price-To-Earnings Ratio (65.4x) compared to the Global Water Utilities industry average (19.1x).

Price to Earnings Ratio vs Fair Ratio

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

UU. PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio65.4x
Fair PE Ratio18.8x

Price-To-Earnings vs Fair Ratio: UU. is expensive based on its Price-To-Earnings Ratio (65.4x) compared to the estimated Fair Price-To-Earnings Ratio (18.8x).

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 UU. forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£10.85
UK£11.49
+5.9%
7.7%UK£12.70UK£9.75n/a13
Nov ’25UK£10.34
UK£11.42
+10.4%
9.1%UK£12.70UK£9.73n/a13
Oct ’25UK£10.64
UK£11.29
+6.1%
9.6%UK£12.70UK£9.73n/a13
Sep ’25UK£10.20
UK£11.12
+9.1%
9.3%UK£12.70UK£9.73n/a13
Aug ’25UK£10.33
UK£11.46
+10.9%
9.5%UK£13.15UK£9.73n/a13
Jul ’25UK£9.87
UK£11.52
+16.8%
9.7%UK£13.15UK£9.73n/a13
Jun ’25UK£10.16
UK£11.36
+11.8%
9.7%UK£13.15UK£9.73n/a13
May ’25UK£10.54
UK£11.26
+6.8%
10.5%UK£13.15UK£9.48n/a13
Apr ’25UK£10.29
UK£11.23
+9.2%
9.5%UK£13.15UK£9.48n/a13
Mar ’25UK£10.18
UK£11.23
+10.4%
9.5%UK£13.15UK£9.48n/a13
Feb ’25UK£10.63
UK£11.26
+6.0%
9.5%UK£13.15UK£9.48n/a13
Jan ’25UK£10.60
UK£11.11
+4.9%
10.1%UK£12.90UK£9.18n/a13
Dec ’24UK£10.92
UK£11.04
+1.1%
10.5%UK£12.90UK£9.18n/a12
Nov ’24UK£10.88
UK£11.16
+2.6%
11.3%UK£13.20UK£9.18UK£10.3413
Oct ’24UK£9.48
UK£11.09
+16.9%
10.7%UK£12.90UK£9.18UK£10.6412
Sep ’24UK£9.32
UK£11.00
+18.0%
11.1%UK£13.10UK£9.47UK£10.2012
Aug ’24UK£9.95
UK£11.02
+10.7%
11.1%UK£13.10UK£9.47UK£10.3312
Jul ’24UK£9.62
UK£11.06
+15.1%
11.3%UK£13.40UK£9.60UK£9.8712
Jun ’24UK£10.32
UK£10.81
+4.7%
12.5%UK£13.40UK£8.50UK£10.1611
May ’24UK£10.82
UK£10.88
+0.5%
12.7%UK£13.40UK£8.50UK£10.5412
Apr ’24UK£10.60
UK£10.65
+0.4%
13.4%UK£13.40UK£8.50UK£10.2911
Mar ’24UK£9.91
UK£10.77
+8.6%
13.3%UK£13.40UK£8.50UK£10.1812
Feb ’24UK£10.52
UK£10.71
+1.8%
13.5%UK£13.40UK£8.50UK£10.6312
Jan ’24UK£9.91
UK£10.56
+6.5%
12.3%UK£12.90UK£8.50UK£10.6012
Dec ’23UK£10.46
UK£10.41
-0.4%
11.5%UK£12.90UK£8.50UK£10.9212
Nov ’23UK£9.45
UK£10.57
+11.9%
11.5%UK£12.90UK£8.50UK£10.8813

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

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