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National Grid Transco
(NYSE:NGG)
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Rating:59Neutral
Price Target:
$80.00
▼(-1.44% Downside)
Action:Reiterated
Date:09/23/26
The score is primarily held back by financial quality concerns—especially structurally negative free cash flow and meaningful leverage—despite solid regulated-utility profitability. Technicals are also weak with the price below key moving averages and negative MACD. Offsetting these are reasonable valuation with a ~4.2% dividend yield and a supportive earnings call featuring clear multi-year growth and EPS targets, though execution and regulatory risks remain.
Positive Factors
Regulated asset growth
The large, multi-year investment programme should expand the regulated asset base and support durable earnings growth through approved network returns. Regulatory coverage for much of the plan improves visibility, while rising transmission and distribution needs reinforce the strategic importance of NGG’s infrastructure.
Negative Factors
Persistently negative free cash flow
Negative free cash flow indicates that ongoing network investment and other capital needs exceed internally generated cash. This creates continuing dependence on debt or equity funding to support expansion and dividends, increasing financing sensitivity and reducing flexibility if project costs or funding conditions worsen.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated asset growth
The large, multi-year investment programme should expand the regulated asset base and support durable earnings growth through approved network returns. Regulatory coverage for much of the plan improves visibility, while rising transmission and distribution needs reinforce the strategic importance of NGG’s infrastructure.
Read all positive factors
National Grid Transco Key Performance Indicators (KPIs)
Any
Third Party Revenue by Segment
Tracks revenue generated from external customers in each segment, indicating the company's reliance on third-party sales and potential market demand.
Tracks revenue generated from external customers in each segment, indicating the company's reliance on third-party sales and potential market demand.
Data provided by:
The Fly
The FlyNational Grid Transco (NGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$81.45B
Dividend Yield4.01%
Average Volume (3M)965.57K
Price to Earnings (P/E)18.3
Beta (1Y)0.07
Revenue Growth1.13%
EPS Growth13.83%
CountryUS
Employees33,026
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)3.32
Shares Outstanding1,005,381,800
10 Day Avg. Volume962,481
30 Day Avg. Volume965,574
Financial Highlights & Ratios
PEG Ratio1.87
Price to Book (P/B)1.61
Price to Sales (P/S)3.52
P/FCF Ratio-16.58
Enterprise Value/Market Cap1.75
Enterprise Value/Revenue7.97
Enterprise Value/Gross Profit24.43
Enterprise Value/Ebitda18.33
Forecast
1Y Price Target
$90.30Price Target Upside11.25% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)6
Revenue Forecast (FY)$26.27B
National Grid Transco Business Overview & Revenue Model
Company Description
National Grid plc engages in the transmission and distribution of electricity and gas. It operates through UK Electricity Transmission, UK Electricity Distribution, New England, New York, National Grid Ventures, and Other segments. The UK Electric...
How the Company Makes Money
NGG primarily makes money through regulated network revenues earned from operating electricity and gas networks. Under this model, an energy regulator sets (or approves) the revenue the company is allowed to collect to recover efficient operating ...
National Grid Transco 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 outlines a strong growth and delivery story: materially higher capital investment (at least GBP 70bn), clear multi-year EPS and RAV targets, strong operating performance and technology-led productivity initiatives. Management backed this with specific execution actions (capital control tower, standardized designs, AI pilots) and measurable early wins (reliability, customer satisfaction, productivity and contracted supply). Key risks remain: higher net debt and leverage as investment ramps, NGV profit and capex contraction, storm/regulatory headwinds in parts of the U.S., commodity and supply-chain inflation, and some regulatory uncertainty (ED3) that may limit the pace at which efficiency gains convert into shareholder returns. On balance, the positive operational progress, visibility of regulatory coverage, and credible execution plans outweigh the risks, though execution and regulatory outcomes will be critical to realize the stated financial targets.Positive Updates
Material Step-Up in Capital Investment and Asset Growth
Group CapEx increased by more than 20% to GBP 11.6bn for the year, driving asset growth of 10.9%. Management set a five-year investment program of at least GBP 70bn (largest ever), supporting ~10% annual asset growth and providing strong multi-year visibility.
Negative Updates
Net Debt Increase and Leverage Headroom
Net debt rose by GBP 2.8bn to GBP 44.2bn (constant currency). Management expects regulatory gearing to move back up toward the high‑60% area over the five‑year frame, creating higher leverage compared with current levels.
Read all updates
Q4-2026 Updates
Positive
Negative
Material Step-Up in Capital Investment and Asset Growth
Group CapEx increased by more than 20% to GBP 11.6bn for the year, driving asset growth of 10.9%. Management set a five-year investment program of at least GBP 70bn (largest ever), supporting ~10% annual asset growth and providing strong multi-year visibility.
Read all positive updates
Company Guidance
The call guided to a five‑year investment program of at least GBP 70 billion (with ~2/3 already covered by regulatory agreements and delivery mechanisms secured for 3/4, including 100% of primary ASTI supply chain), driving ~10% p.a. asset growth, an underlying EPS CAGR of 8%–10% and progressive dividends in line with CPIH; FY‑2026 results included CapEx up >20% to GBP 11.6 billion, asset growth 10.9%, underlying operating profit GBP 5.7 billion, underlying EPS +8% at constant currency and DPS +3.8%, and cash from operations GBP 7.9 billion (up 15%) with net debt ~GBP 44.2 billion; FY‑2027 guidance expects CapEx ~+10% to nearly GBP 13 billion and underlying EPS +13%–15% from a FY‑2026 baseline of GBP 0.78; regional five‑year plans include ~GBP 40 billion UK (GBP 31 billion transmission, GBP 9 billion distribution) and ~GBP 29 billion US (GBP 17 billion New York, GBP 12 billion New England), UK RAV >60% growth to >GBP 60 billion, US regulated asset base ~+50% to >GBP 45 billion, plans to connect up to 35 GW new generation and 19 GW new demand, build ~7,500 km of network and recruit ~6,000 FTE (2,000 graduates/apprentices); operational metrics cited include UK transmission reliability 99.99999%, contracted spend of GBP 2.5 billion (Eastern Green Link 3/4) and GBP 1 billion (CLCPA phase II), Massachusetts FLISR covering 34% customers (avoiding >15 million customer outage minutes in six months), >2 million US smart meters, an 18% increase in after‑call satisfaction, a 30% reduction in crew travel time in a NY pilot, and expected UK customer savings (dynamic line rating) up to GBP 50 million over five years.National Grid Transco Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
58
Neutral
Cash Flow
45
Neutral
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.97B | 18.38B | 19.85B | 21.66B | 18.45B |
| Gross Profit | 5.87B | 14.23B | 14.58B | 13.04B | 12.35B |
| EBITDA | 7.82B | 7.65B | 6.83B | 7.25B | 6.43B |
| Net Income | 3.29B | 2.90B | 2.29B | 7.80B | 2.35B |
Balance Sheet | |||||
| Total Assets | 108.29B | 106.74B | 98.33B | 92.70B | 94.86B |
| Cash, Cash Equivalents and Short-Term Investments | 2.83B | 6.93B | 4.25B | 2.73B | 3.33B |
| Total Debt | 46.76B | 47.54B | 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 | -3.82B | -3.39B | -1.27B | -585.92M | 340.31M |
| Operating Cash Flow | 6.33B | 5.27B | 5.64B | 5.57B | 5.65B |
| Investing Cash Flow | -4.57B | -10.87B | -7.83B | -14.60M | -14.79B |
| Financing Cash Flow | -2.73B | 6.36B | 2.62B | -5.59B | 9.18B |
National Grid Transco Technical Analysis
Positive
81.17
Price Trends
78.13
Positive
79.88
Positive
82.15
Positive
Market Momentum
1.06
Negative
67.26
Neutral
94.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGG, the sentiment is Positive. The current price of 81.17 is above the 20-day moving average (MA) of 77.66, above the 50-day MA of 78.13, and below the 200-day MA of 82.15, indicating a bullish trend. The MACD of 1.06 indicates Negative momentum. The RSI at 67.26 is Neutral, neither overbought nor oversold. The STOCH value of 94.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NGG.
National Grid Transco Risk Analysis
National Grid Transco disclosed 9 risk factors in its most recent earnings report. National Grid Transco 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 Transco 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% | |
64 Neutral | $69.26B | 21.89 | 10.01% | 2.98% | 8.63% | -14.89% | |
63 Neutral | $94.09B | 18.12 | 9.88% | 3.55% | 6.33% | 8.98% | |
62 Neutral | $103.98B | 21.68 | 12.61% | 3.32% | 6.40% | 6.90% | |
59 Neutral | $81.45B | 18.30 | 8.47% | 4.01% | 1.13% | 13.83% | |
58 Neutral | $55.27B | 21.57 | 8.89% | 4.28% | 21.98% | -0.39% | |
56 Neutral | $29.03B | 9.53 | 9.21% | 1.52% | 5.66% | 28.27% |
* Utilities Sector Average
NGG
National Grid Transco
82.64
8.93
12.11%
AEP
American Electric Power
130.64
17.96
15.93%
D
Dominion Energy
65.40
7.21
12.38%
DUK
Duke Energy
125.40
2.46
2.00%
PCG
PG&E
12.98
-3.11
-19.32%
SO
Southern Co
93.82
0.74
0.80%
National Grid Transco Corporate Events
National Grid Updates Voting Rights and Secures FCA Approval for €20bn Note Programme
Aug 28, 2026
As of 31 July 2026, National Grid’s registered capital comprised 5,249,831,589 ordinary shares, of which 223,031,204 were held in treasury, leaving 5,026,800,385 shares with voting rights for regulatory disclosure calculations. On 4 and 17 A...
National Grid Overhauls Operating Model as £70bn Network Investment Ramps Up
Aug 3, 2026
On 3 August 2026, National Grid announced a major simplification of its operating model to sharpen execution across its UK and US businesses as it delivers a £70 billion investment programme in energy networks. Effective 1 September 2026, the...
National Grid Updates Voting Rights and Discloses July Executive Share Transactions
Jul 31, 2026
On 1 July 2026, National Grid reported that its registered capital at 30 June 2026 comprised 5,198,968,690 ordinary shares, of which 223,090,607 were held in treasury, leaving 4,975,878,083 shares with voting rights as the new disclosure denominat...
National Grid Updates Share Capital After Scrip Dividend Issue
Jul 23, 2026
On 23 July 2026, National Grid plc reported that it had issued 50,862,899 new ordinary shares earlier that day under its Scrip Dividend Scheme for the 2025/26 final dividend, increasing its registered capital to 5,249,831,589 ordinary shares. Afte...
National Grid Adds Over 50 Million Shares for 2025/26 Scrip Dividend
Jul 22, 2026
On 22 July 2026, National Grid plc announced that it had applied to the UK Financial Conduct Authority and the London Stock Exchange for the admission to listing and trading of 50,862,899 new ordinary shares tied to its Scrip Dividend Scheme for t...
National Grid Wins Strong Shareholder Backing at 2026 AGM
Jul 14, 2026
National Grid plc reported the voting results of its 2026 Annual General Meeting held on 14 July 2026 in Warwick, where shareholders considered a full slate of routine and strategic resolutions. The meeting covered acceptance of the annual report ...
National Grid Ventures to Invest $1.75 Billion in Joulent to Power US AI Data Centre Growth
Jul 1, 2026
On 1 July 2026, National Grid said its National Grid Ventures unit will invest $1.75 billion for a 35% stake in Joulent, a US-focused platform developing contracted power generation and high-voltage infrastructure for large load customers such as ...
National Grid Updates Voting Capital and Reports Higher BlackRock Stake
Jun 30, 2026
As of 31 May 2026, National Grid reported a total of 5,198,968,690 ordinary shares in issue, of which 223,258,076 were held as treasury shares, leaving 4,975,710,614 shares carrying voting rights. This updated denominator provides the basis for sh...
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.