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Pennon share price: what to expect from its Q3 results

The FTSE 250 utility group that owns South West Water and Viridor has seen its share price climb 26% over the last 12 months, with investors eager for an update on the company’s performance in its Q3 results on Monday.

When is Pennon’s earnings date?

Pennon Group will report its Q3 earnings on 25 March.

Pennon results preview: what does the city expect?

Over the last 12 months, Pennon’s share price has climbed more than 30% higher to £7.89, recovering from a low of £5.83 in March last year.

Over the first half of its 2018 fiscal year, Pennon’s board has recommended an interim dividend of 12.84p a share, representing a 7.3% increase compared with the same period last year. The interim dividend will be paid on 4 April 2019 to shareholders on the register on 25 January 2019.

Pennon has a price/earnings (PE) of 15x, suggesting that the stock may be overvalued, especially when its larger rivals United Utilities Group and Severn Trent by comparison have a PE ratio of 16x and 15.4x respectively.

Analysts and investors in the sector are awaiting a Q3 trading update on the stock, with both expecting Pennon to announce that it remains firmly on track with its full-year guidance.

Pennon shifts focus amid regulatory pressures

Water utilities remain a heavily regulated market, which is why companies like Pennon have moved into unregulated segments of the market, specifically waste recycling.

With that in mind, investors will focus on the performance of the group’s recycling, renewable energy and waste management unit Viridor in its upcoming trading update.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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