Deutsche Bank upgrades Pennon to 'hold' from 'sell'.
Deutsche Bank upgraded Pennon on Friday to ‘hold’ from ‘sell’ and lifted the price target to 570p from 490p following the "deeply discounted" rights issue earlier this week.
Pennon Group
31 January 2025 15:50:08
Source: Sharecast
"The amount of £490m was almost exactly in line with the £500m we anticipated," it said. "However, unlike for National Grid last year, the stock has so far traded very well after the announcement.
"It is possible that this changes from Monday when the stock goes ex rights."
However, Deutsche Bank said other elements of the update were better than expected.
"Pennon announced a material per-share dividend cut, although slightly better than we envisaged," it said.
"This should leave the shares yielding circa 6%, above the circa 5.0-5.5% for peers United Utilities and Severn Trent."
Halifax is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
