United Utilities (LON:UU) Shares Fall on Downgrade, Trading Range Intact
Shares of United Utilities (LON:UU) fell by 1.02% to 1,194.25p today, continuing a period of stagnant trading that has lasted since October. This downturn follows a downgrade by Morgan Stanley, which adjusted its rating from Overweight to Equal Weight. The firm cited the stock’s strong projected performance in 2025 as a reason for its more cautious outlook.
Recent Downgrades and Price Targets
Morgan Stanley also revised its price target for United Utilities from 1,475 GBp to 1,450 GBp. This updated target indicates a potential upside of approximately 21%, but it suggests that much of this potential growth may already be factored into the current stock price.
Analysts Show Caution
This downgrade aligns with a growing trend among analysts expressing caution regarding United Utilities’ valuation after its strong gains earlier this year. The downgrade reflects a shift in sentiment for the company, which is based in North West England.
- In June 2025, RBC Capital downgraded United Utilities from Outperform to Sector Perform, setting a price target at 1,175 GBp.
- RBC acknowledged strong operational performance but preferred to wait for more clarity on future outperformance.
- UBS also downgraded its rating in April 2025, reducing the target to 1,150 GBp, highlighting concerns over future returns.
Counterpoints and Upgrades
Despite this cautious sentiment, some analysts remain optimistic. Barclays upgraded United Utilities from Equal Weight to Overweight in August 2025, increasing its price target significantly from 1,280 GBp to 1,535 GBp. This upgrade was based on improving prospects within the UK water sector due to upcoming regulatory changes.
Market Sentiment and Future Directions
The ongoing sideways trading pattern since October indicates market indecision regarding the future trajectory of United Utilities shares. With the regulatory landscape for UK water utilities undergoing changes and divergent analyst opinions, future stock direction will likely depend on operational performance updates and clarity on the next price control period.
Investors should keep a close eye on market developments as new information becomes available, which may influence the outlook for United Utilities shares.
