BNP Paribas Exane has started coverage on National Grid (NGG, Financial) U.S. shares, assigning an Outperform rating. The firm has set a price target of $80.40 for the stock. This rating reflects BNP Paribas Exane's positive outlook on NGG's potential performance in the market, indicating confidence in the company's prospects.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for National Grid PLC (NGG, Financial) is $77.98 with a high estimate of $79.70 and a low estimate of $76.26. The average target implies an upside of 7.31% from the current price of $72.67. More detailed estimate data can be found on the National Grid PLC (NGG) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, National Grid PLC's (NGG, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for National Grid PLC (NGG, Financial) in one year is $57.35, suggesting a downside of 21.08% from the current price of $72.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the National Grid PLC (NGG) Summary page.
NGG Key Business Developments
Release Date: May 15, 2025
- Revenue: Underlying operating profit increased by 12% to GBP5.4 billion at constant currency.
- Capital Investment: Record capital investment of GBP9.8 billion, 20% higher than last year.
- Underlying Earnings Per Share (EPS): Increased by 2% to 73.3p, slightly ahead of guidance.
- Dividend: Final dividend declared at 30.88p per share, total dividend for the year at 46.72p, a 3.21% increase.
- Return on Equity (UK Electricity Transmission): 8.3%, outperforming its allowed return by 100 basis points.
- Return on Equity (UK Electricity Distribution): 7.9%, impacted by Storm Darragh costs and lower-than-anticipated allowances.
- Return on Equity (US New York): 8.7%, 94% of allowed, 20 basis points higher than the prior year.
- Return on Equity (US New England): 9.1%, 92% of allowed.
- Net Debt: Reduced by GBP1.7 billion to GBP41.4 billion.
- Cash Flow: Cash generated from continuing operations was GBP7 billion, down 4% compared to the prior year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- National Grid PLC (NGG, Financial) delivered a record capital investment of GBP9.8 billion, which is 20% higher than the previous year.
- The company achieved a 12% increase in underlying operating profit, reaching GBP5.4 billion at constant currency.
- National Grid PLC (NGG) has secured supply chain and delivery mechanisms for more than two-thirds of its GBP60 billion capital investment plan.
- The company reported a strong return on equity of 8.3% in UK electricity transmission, outperforming its allowed return by 100 basis points.
- National Grid PLC (NGG) has a comprehensive financing strategy in place, including a GBP7 billion equity raise, providing funding clarity until at least 2031.
Negative Points
- The company faced challenges with the Eastern Green Links 1 project, which is 16 months delayed, potentially leading to penalties from Ofgem.
- National Grid PLC (NGG) experienced a lower-than-expected return on equity in UK electricity distribution due to storm impacts and real price effects.
- The company recorded an accounting impairment of GBP303 million for its community offshore wind joint venture due to policy uncertainty.
- There are ongoing affordability pressures in the US, particularly in Massachusetts, where high commodity prices have impacted gas customers.
- National Grid PLC (NGG) faces potential risks from higher tariffs in the US, although the impact is mitigated by a largely domestic supply chain.
