1000 GMT - Pennon and United Utilities are set to outperform their competitors, Barclays analysts write in a research note to clients. In August, Barclays downgraded its expectations for the two utility companies due to structural challenges across the sector that limited earnings potential. However, Barclays believes U.K. water regulator Ofwat could implement an outturn adjustment mechanism, which would place greater emphasis on water companies' performance relative to other providers. Pennon and United Utilities would benefit from this arrangement, which would lead to higher returns to shareholders, the analysts write. Barclays upgraded Pennon to overweight from equal weight, and United Utilities to equal weight from under weight. Pennon shares trade up 2.35% at 608.50 pence while United Utilities shares trade up 0.9% at 1080.50 pence. (adam.whittaker@wsj.com)
(END) Dow Jones Newswires
December 12, 2024 05:00 ET (10:00 GMT)
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