MARKET TALK: Morgan Stanley Ups United Utilities To Overweight

23rd Jul 2010 07:35

0635 GMT [Dow Jones] Morgan Stanley raises United Utilities Group (UU.LN) to overweight from equalweight, and boosts its target price to 595p from 570p. Keeps fellow water company Severn Trent (SVT.LN) at overweight, noting it regards having both companies at overweight as the best way to play the theme of low risk equity regulatory asset base [RAB] growth and robust dividends driving attractive total returns in uncertain times. "We see the best total returns for these names (12% per annum for United Utilities and 13% per annum for Severn Trent on average for the 2010-15 new regulatory period) coupled with low relative valuations," it adds. United Utilities shares closed at 564p, while Severn Trent shares closed at 1276p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires July 23, 2010 02:35 ET (06:35 GMT)