RBC Bullish on UK Utilities, Names Pennon

RBC says UK regulated utilities have strong earnings visibility and cash‑flow growth, driven by asset expansion and inflation‑linked returns.
RBC maintains “outperform” on Pennon (price target 650p) and SSE (price target 3,025p), while rating National Grid and Severn Trent as “sector perform”.
Pennon offers >100 bps yield advantage, EPS CAGR ~10% to FY31, trading ~8% premium to FY27 RAB; SSE and National Grid show five‑year RAB growth of ~23% and 12% respectively.
RBC highlights upcoming PR29 review, potential capex “re‑openers” (Mar‑May submissions, Dec decisions) and real returns of 5.7% for water, nominal >9% for networks.