Deutsche Bank has upgraded United Utilities Group PLC (LSE:UU.) to 'buy' from 'hold', raising its price target from 1,130p to 1,200p.
The move marks the bank's first positive recommendation in the water utility space in 18 months.
James Brand, Deutsche Bank's analyst, highlighted the resilience of well-performing companies such as UU amidst challenging regulatory reviews.
“Good performing companies should be able to earn at least reasonably attractive returns, or they should appeal to the CMA,” Brand noted.
UU is recognised for its strong operational performance and trades at a modest premium to its regulated asset base (RAB).
The company's management expressed confidence during recent results, leading Deutsche Bank to revise its medium-term estimates for incentive rewards upward.
In afternoon trading, the stock was up 11p at 1,107.5p.