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National Grid
(LSE:NG)
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Rating:59Neutral
Price Target:
1,202.00 p
▲(1.39% Upside)
Action:Reiterated
Date:09/23/26
The score is primarily constrained by financial cash-flow pressure (negative free cash flow alongside meaningful leverage) and weak-to-neutral technical momentum (below key moving averages, negative MACD). Offsetting factors include a positive earnings-call setup with strong multi-year investment/EPS growth guidance and a supportive income profile (4.21% dividend yield with a mid-teens P/E).
Positive Factors
Regulated revenue model
Revenue is anchored by regulated network charges and allowed returns on invested capital in the UK and U.S., reducing exposure to commodity-price speculation. This model can support relatively visible earnings while approved network upgrades expand the asset base over time.
Negative Factors
Persistent negative free cash flow
Free cash flow has been persistently negative, including sizable 2025–2026 outflows, despite positive operating cash generation. Heavy investment therefore is not self-funded, increasing reliance on debt or equity and reducing flexibility if capital needs or funding costs remain elevated.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated revenue model
Revenue is anchored by regulated network charges and allowed returns on invested capital in the UK and U.S., reducing exposure to commodity-price speculation. This model can support relatively visible earnings while approved network upgrades expand the asset base over time.
Read all positive factors
National Grid (NG) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£61.38B
Dividend Yield3.97%
Average Volume (3M)11.53M
Price to Earnings (P/E)18.7
Beta (1Y)0.76
Revenue Growth-3.76%
EPS Growth8.20%
CountryUK
Employees33,026
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.66
Shares Outstanding5,026,909,000
10 Day Avg. Volume9,843,940
30 Day Avg. Volume11,526,427
Financial Highlights & Ratios
PEG Ratio1.92
Price to Book (P/B)1.60
Price to Sales (P/S)3.55
P/FCF Ratio-16.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£1,296.75Price Target Upside9.38% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)0.9
Revenue Forecast (FY)£19.74B
National Grid Business Overview & Revenue Model
Company Description
National Grid plc operates as a major energy utility, focusing on the transmission and distribution of both electricity and natural gas. Its business is organized into distinct geographical and operational segments. Within the United Kingdom, it o...
How the Company Makes Money
National Grid makes money primarily through regulated network revenues earned from owning and operating energy infrastructure. In both the UK and U.S., its major revenue streams are set under regulatory frameworks that allow the company to recover...
National Grid Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call presented a clear and positive investment and operational story: management outlined a major capital investment program (at least GBP 70bn), reiterated strong near-term results (underlying profit GBP 5.7bn, EPS +8%), and highlighted multiple technology-driven productivity gains and regulatory wins (e.g., T3). Material risks were acknowledged — rising net debt, portions of the plan not yet fully covered by regulation, NGV earnings decline, input-cost inflation, and RIIO-ED3 uncertainty — but management emphasized de-risking actions (2/3 covered by agreements, 3/4 delivery mechanisms secured), operational control improvements, and technology pilots that should mitigate execution risk. Overall, the positive momentum, visibility of regulated growth, and operational progress outweigh the acknowledged challenges.Positive Updates
Significant Capital Investment Step-Up
CapEx increased by more than 20% to GBP 11.6bn for the year, supporting a five-year commitment to invest at least GBP 70bn, with expected annual asset growth of ~10% and underlying EPS growth guidance of 8%–10%.
Negative Updates
Reduced Contribution from National Grid Ventures
NGV underlying operating profit fell to GBP 401m, down GBP 52m year-over-year, and capital expenditure declined 70% to GBP 109m following disposals (e.g., Grain LNG, National Grid Renewables).
Read all updates
Q4-2026 Updates
Positive
Negative
Significant Capital Investment Step-Up
CapEx increased by more than 20% to GBP 11.6bn for the year, supporting a five-year commitment to invest at least GBP 70bn, with expected annual asset growth of ~10% and underlying EPS growth guidance of 8%–10%.
Read all positive updates
Company Guidance
Management set out a five‑year framework to invest at least GBP70bn, supporting ~10% annual asset growth and an underlying EPS CAGR of 8–10% (FY27 guidance: capex ~+10% to nearly GBP13bn and EPS +13–15% from a FY26 baseline of GBP0.78), with dividend growth tied to CPIH (this year DPS +3.8%). FY26 delivery included CapEx >20% to GBP11.6bn, underlying operating profit GBP5.7bn and underlying EPS +8% at constant currency; about 2/3 of the GBP70bn is already covered by regulatory agreements, delivery mechanisms secured for 3/4 and 100% of primary ASTI supply chain, with GBP2.5bn and GBP1bn contracted on major projects. Regional plans are ~GBP40bn in the U.K. (transmission ~GBP31bn, distribution ~GBP9bn) to connect 35GW of generation and 19GW of demand, build ~7,500 km, grow RAV >60% to >GBP60bn and recruit ~6,000 staff (2,000 graduates/apprentices); and ~GBP29bn in the U.S. (New York ~GBP17bn, New England ~GBP12bn) to grow U.S. RAV ~50% to >GBP45bn. Key operating/efficiency metrics cited include UK transmission reliability 99.99999%, UK ET underlying profit GBP1.7bn (CapEx GBP4.4bn, RAV GBP23.8bn, ROE 8.2%), New York underlying profit GBP1.7bn (CapEx GBP3.4bn, rate base $25.4bn, ROE 9%), Massachusetts FLISR coverage 34% (avoided >15m outage minutes), dynamic line ratings saving up to GBP50m over five years, GridCARE identifying 650MW of capacity, Emerald AI trials reducing data‑center load up to 40%, >2m U.S. smart meters, US after‑call satisfaction +18%, cash from operations GBP7.9bn, net debt GBP44.2bn and net finance costs GBP1.3bn, with ~70% of U.S. gross assets hedged in dollars.National Grid Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
60
Neutral
Cash Flow
45
Neutral
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.69B | 18.38B | 19.85B | 21.66B | 18.45B |
| Gross Profit | 5.78B | 18.38B | 19.85B | 21.66B | 18.45B |
| EBITDA | 7.73B | 7.28B | 7.65B | 6.19B | 6.04B |
| Net Income | 3.24B | 2.90B | 2.29B | 7.80B | 2.35B |
Balance Sheet | |||||
| Total Assets | 108.28B | 106.74B | 98.33B | 92.70B | 94.86B |
| Cash, Cash Equivalents and Short-Term Investments | 2.83B | 6.93B | 4.25B | 2.77B | 3.35B |
| Total Debt | 46.76B | 48.36B | 47.07B | 42.98B | 45.47B |
| Total Liabilities | 68.95B | 68.92B | 68.43B | 63.13B | 71.00B |
| Stockholders Equity | 39.30B | 37.80B | 29.87B | 29.54B | 23.83B |
Cash Flow | |||||
| Free Cash Flow | -3.76B | -2.50B | -514.00M | 6.00M | 728.00M |
| Operating Cash Flow | 6.23B | 6.81B | 6.94B | 6.90B | 6.27B |
| Investing Cash Flow | -4.49B | -10.57B | -7.50B | 240.00M | -14.01B |
| Financing Cash Flow | -2.69B | 4.53B | 987.00M | -7.17B | 7.77B |
National Grid Technical Analysis
Positive
1185.50
Price Trends
1162.53
Positive
1190.38
Positive
1221.81
Negative
Market Momentum
19.17
Negative
65.37
Neutral
83.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:NG, the sentiment is Positive. The current price of 1185.5 is above the 20-day moving average (MA) of 1180.55, above the 50-day MA of 1162.53, and below the 200-day MA of 1221.81, indicating a neutral trend. The MACD of 19.17 indicates Negative momentum. The RSI at 65.37 is Neutral, neither overbought nor oversold. The STOCH value of 83.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:NG.
National Grid Risk Analysis
National Grid disclosed 9 risk factors in its most recent earnings report. National Grid reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
National Grid Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | £11.18B | 17.50 | 27.72% | 3.57% | 21.96% | 121.69% | |
62 Neutral | £9.76B | 26.06 | 20.35% | 3.90% | 16.66% | 61.25% | |
60 Neutral | £30.23B | 24.41 | 9.45% | 2.76% | 0.54% | -2.65% | |
59 Neutral | £61.38B | 18.66 | 8.47% | 3.97% | -3.76% | 8.20% | |
57 Neutral | £6.81B | 9.43 | 21.92% | 3.77% | 0.27% | ― |
* Utilities Sector Average
GB:NG
National Grid
1,237.50
135.82
12.33%
GB:CNA
Centrica
156.20
-15.04
-8.79%
GB:SVT
Severn Trent
3,254.00
573.15
21.38%
GB:SSE
SSE
2,604.00
757.44
41.02%
GB:NTEA
Northern Electric
119.00
-0.63
-0.52%
GB:UU
United Utilities
1,518.00
362.01
31.32%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.