Citi expresses concern around UK water utilities' premium valuation

9th Mar 2016 13:26

(ShareCast News) - Analysts at Citi on Wednesday recommended investors turn off the tap, cautioning they were increasingly concerned about UK water utilities' premium valuation.Their share prices had run up by 83% since 2010, outperforming the wider sector by 101% during that time frame, analyst Jenny Ping said in a research note sent to clients.She downgraded her recommendation on Pennon and Severn Trent to 'sell', while leaving its stance on United Utilities - its preferred UK play in the sector - at 'neutral'.Ping flagged the risks the sector was facing including, potential changes to tax legislation, the at least £8bn-worth of regulatory asset valuations put up for sale and unsupportive falling return spreads.

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