On Wednesday, RBC Capital adjusted its stance on Pennon Group Plc (LSE:LON: PNN ) (OTC:PEGRF) stock, downgrading the utility company from Outperform to Sector Perform. The firm also reduced its price target on the stock to GBP6.75 from the previous GBP7.25. The revision comes amid concerns over the company's capital expenditure and balance sheet metrics. The analyst from RBC Capital noted that the anticipated decline in capital expenditures for the financial year 2025 is no longer expected, which puts Pennon Group's balance sheet near the upper limit of its 55-65% Net Debt/Regulatory Capital Value (RCV) threshold. This situation is further complicated by a change in tone regarding the potential need for future equity. According to the analysis, Pennon Group may need to restructure its balance sheet soon to support future growth and deliver on its business plan.