Broker snap: United Utilities remains a safe haven, says Investec

22nd Sep 2011 12:36

With no surprises in United Utilities' trading statement on Thursday, Investec reiterated its buy rating as the water group said it was on track to meet its targets."All is on track, and we think UU remains a safe haven in the present market environment," said analyst Angelos Anastasiou.The group said that current trading is in line, and revenues will be higher last year, reflecting a 4.5% price increase. However, the company has reiterated that it expects operating expenses to be above last year, due to higher infrastructure renewals expenditure and depreciation, as well as "other inflationary cost pressures". "It has a yield of 5.2%, with a dividend policy of real growth of 2% per annum to 2015, and there is 18% upside to our target price of 720p (23% total return)," Anastasiou said.The stock was 2.38% down at 595.5p by 12:22, outperforming the relative FTSE 100 index which has tumbled 4.81%. BC