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Highlights

  • Adjusted EPS rose 2% to 47.5p in FY2025, but 2026 guidance was lowered to 41.5p–43.0p.
  • UTG shares closed 9.08% lower at GBX 525.50 following the results announcement.
  • Brokers issued Hold and Buy ratings with price targets ranging from GBX 600 to GBX 774.

Shares in The Unite Group PLC (LSE:UTG) fell 9.08% to GBX 525.50 on 24 February after the company released its full-year 2025 results and 2026 earnings guidance. The decline followed softer forward guidance, including lower expected adjusted earnings per share and reduced occupancy assumptions.

Despite the share price drop, several brokers reiterated Hold and Buy ratings with target prices above the current trading level.

Earnings Guidance Weighs on Shares

Unite reported a 2% increase in adjusted EPS to 47.5p for the year ended 31 December 2025, compared with 46.6p in 2024. However, IFRS diluted EPS declined to 19.9p, down from 96.1p in the prior year.

For 2026, the Group guided adjusted EPS in the range of 41.5p to 43.0p, citing lower income from the Empiric portfolio ahead of integration and reduced occupancy expectations. The cost of debt is forecast to rise to 4.3% in 2026, up from 3.9% in 2025.

Management expects 2026/27 income at the lower end of the 2–3% rental growth range, with occupancy projected between 93% and 96%, compared with 95.2% achieved for 2025/26.

Rental Growth and Occupancy Trends

For the 2025/26 academic year, Unite achieved 4.0% rental growth and 95.2% occupancy, compared with 8.2% rental growth and 97.5% occupancy in 2024/25.

Capital Allocation and Portfolio Strategy

Unite completed GBP 214 million in disposals during 2025 (Unite share: GBP 142 million) and is targeting GBP 300–400 million in annual disposals. The Group also agreed the sale of St Pancras Way, London to USAF for GBP 186 million (Unite share: GBP 126 million).

A GBP 100 million share buyback programme is underway.

The acquisition of the Empiric portfolio was completed in January 2026, with annual cost synergies increased to GBP 17 million. Unite is increasing its alignment with high-tariff universities, targeting 80% exposure through disposals and committed developments.

Broker Reaction: Hold and Buy Ratings Maintained

Following the results, broker sentiment remained constructive despite the near-term earnings outlook.

  • Panmure Liberum reiterated a Hold rating with a target price of GBX 675.
  • Berenberg maintained a Buy rating, setting a target price of GBX 774.
  • Stifel Europe issued a Hold rating with a GBX 600 price target.

All three targets imply potential upside from current levels.

The drop in UTG’s share price followed lower 2026 earnings guidance, softer occupancy assumptions and higher financing costs. While rental growth continues and strategic disposals are progressing, investors responded to the revised EPS outlook.

Frequently Asked Questions (F&Q)

Why did UTG shares fall after the results?
The decline followed 2026 adjusted EPS guidance of 41.5p–43.0p, below the 47.5p reported for 2025, alongside lower occupancy guidance and higher debt costs.

What rental growth has Unite achieved for 2025/26?
The company reported 4.0% rental growth and 95.2% occupancy for the 2025/26 academic year.

What are brokers’ target prices for UTG?
Targets range from GBX 600 (Stifel Europe) and GBX 675 (Panmure Liberum) to GBX 774 (Berenberg).