RBC Capital has increased its target price for United Utilities Group (LON:UU.) from £14.50 to £15.50 while maintaining a ‘Sector Perform’ rating.
Strong Recent Performance
The stock has delivered robust returns, rising 18% year-to-date and 34% over the past year. Current analysis suggests it trades at a fair valuation relative to peers.
Capital Raise Drives Adjustment
This upward revision follows the company’s announcement of an £800 million capital raise and fresh investment plans. The move bolsters funding for upcoming projects.
Impact on Leverage and Regulatory Metrics
The capital expansion elevates the debt-to-equity ratio to 5.71 amid higher interest rates, signaling increased leverage. Regulators anticipate a roughly 10% decline in the regulatory capital value (RCV) during the period.
RBC Capital views these changes as manageable. Analyst Alexander Wheeler updated the target price and rating, noting the balance sheet remains resilient enough to support planned investments.
Market Reaction
Shares climbed following the announcement. United Utilities Group also trades over-the-counter as UUGRY.
This information serves as a general overview; investors should conduct their own due diligence.
