Investment Rating - The report assigns an "Overweight" rating to Severn Trent (SVT.L) with a price target of 3,200p, compared to the closing price of 2,700p on May 19, 2025 [5]. Core Insights - The FY25 results exceeded expectations, with a 12% increase in adjusted EPS compared to consensus, and a 3% increase in adjusted EBIT [8]. - The implied FY26 EPS guidance suggests a small upside of approximately 2% above street estimates, indicating operational alignment with consensus [2][8]. - Severn Trent is guiding for at least £25 million in post-tax real ODI rewards for FY26, reflecting confidence in continued operational performance in the new regulatory period [3][8]. - A longer-term adjusted EPS guidance indicates a potential doubling of EPS from FY25 to FY28, with FY28 EPS expected to be around 224p per share, which is approximately 4% below consensus [4][8]. Financial Performance - The FY25 results showed adjusted EBITDA of £1,059 million, beating the Bloomberg consensus of £1,034 million by 2% [9]. - Adjusted EBIT for FY25 was reported at £590 million, exceeding the consensus estimate of £574 million by 3% [9]. - Adjusted EPS for FY25 was 112 GBp per share, surpassing the consensus of 100 GBp by 12% [9]. - Net debt as of March 2025 is estimated at £8.5 billion, slightly above the consensus of £8.2 billion [9].