United Utilities' First-Half Results Bear No Surprises; Shares Rich

We maintain our fair value estimate of GBX 760 per share along with our no-moat rating after United Utilities released fiscal 2022 first-half results largely in line with what it preannounced in its late September trading statement. Interim dividend is set at GBX 14.5, 0.6% higher than last year. Applying the same rate to the final dividend points to a total 2022 dividend of GBX 43.46, implying a 4.1% dividend yield, slightly below the sector average. On the other hand, we foresee a 0.9% average annual decline in adjusted EPS through fiscal 2026, well below the 6% average annual growth that we project for the sector in the meantime. All in all, we view the shares as significantly overvalued despite an unappealing earnings profile.