Shares of Northumbrian Water Group Plc, supplier for 4.6 million people in England and Gibraltar, climbed to a record after Morgan Stanley raised its rating on the company. Stock in Severn Trent Plc shares also rose.
Analysts led by Jonathan Hogan raised their recommendation on Northumbrian to ``overweight'' from ``equal-weight'' and price target to 370 pence from 305 pence. The shares gained 8 pence, or 2.5 percent, to close at 329.25 pence in London.
``Northumbrian offers the most upside potential'' in the industry, ``and is the pick of the bunch,'' the analysts said in a note today.
Morgan Stanley raised its rating on Severn Trent, the U.K.'s second-biggest water company, to ``equal-weight'' from ``underweight'' and their price target to 1,570 pence from 1,300 pence. The utility ``is now the second-cheapest stock in the sub-industry,'' the analysts said in the note.
The shares rose 15 pence, or 1 percent, to close at 1480 pence, their highest in more than three months.
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