National Grid (NG) AI Stock Analysis

• Market Cap: £51.30B
• Dividend Yield: 5.83%
• Average Volume (3M): 10.96M
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.78
• Revenue Growth: -7.42%
• EPS Growth: 5.84%
• Country: UK
• Employees: 31,425
• Sector: Utilities
• Sector Strength: 84
• Industry: Regulated Electric
• EPS (TTM): 0.45
• Shares Outstanding: 4,901,633,300
• 10 Day Avg. Volume: 9,629,930
• 30 Day Avg. Volume: 10,961,636
• PEG Ratio: 0.02
• Price to Book (P/B): 1.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.15K
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £1,180.50
• Price Target Upside: 11.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 73 Outperform
• Price Target: 1,169.00p ▲(9.97%Upside)

The overall score reflects strong earnings call results and sound valuation, with solid financial performance despite some leverage concerns. Positive technical indicators further support the stock’s outlook, while high dividend yield offers additional investor appeal.

Positive Factors

Growth Potential

The plan includes significant investments on the existing network and network expansion, indicating strong future growth potential.

Investment Plan

The £35bn Totex plan is a step change in investment well flagged and expected by the market.

Market Valuation

National Grid trades at a discount on a 12.0x calendar 2026E P/E compared to its European network peers like Terna and Redeia.

Negative Factors

Asset Divestment

Recent press reports suggest consideration of around $1bn for the Renewable business, indicating potential above its book value.

Regulatory Risks

Potential catalysts include divestments of non-core assets and a potentially more benign stance from the regulator Ofgem on UK Electricity Transmission.

National Grid Business Overview & Revenue Model

Company Description

National Grid plc transmits and distributes electricity and gas. The company operates through UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, and New York segments. The UK Electricity Transmission segment provides electricity transmission and construction work services in England and Wales. The UK Electricity Distribution segment offers electricity distribution services in Midlands, and South West of England and South Wales. The UK Electricity System Operator segment provides balancing services for supply and demand of electricity on Great Britain's electricity transmission system; and acts as an agent on behalf of transmission operators. The New England segment offers electricity and gas distribution, and electricity transmission services in New England. The New York segment provides electricity and gas distribution, and electricity transmission services in New York. It also engages in the provision of transmission services through electricity interconnectors and LNG importation at the Isle of Grain; sale of renewables projects; and leasing and sale of commercial property, as well as insurance activities in the United Kingdom. The company was founded in 1990 and is headquartered in London, the United Kingdom.

How the Company Makes Money

National Grid makes money primarily through regulated revenue models in the electricity and gas sectors. In the UK, it earns revenue from operating electricity and gas transmission networks, which are regulated by the UK energy regulator, Ofgem. The company is allowed to charge fees for the use of its networks, which are determined through regulatory price controls that provide a stable and predictable income. In the United States, National Grid operates gas and electricity distribution networks, with revenues generated through regulated rates approved by state public utility commissions. Additionally, National Grid invests in renewable energy projects and grid modernization initiatives, which contribute to its earnings. The company's revenue streams are also supported by strategic partnerships and ventures aimed at enhancing energy efficiency and sustainability.

National Grid Financial Statement Overview

Summary

National Grid exhibits strengths in operational efficiency and effective use of equity, but faces challenges with revenue fluctuations and high leverage. While profitability indicators are strong, cash flow inconsistencies and debt levels present areas of concern, requiring careful management to sustain long-term growth and stability.

Income Statement

The company demonstrates a solid gross profit margin consistently over 100%, indicating strong pricing power and cost control. However, its net profit margin shows volatility, with a noticeable dip in 2024. Revenue has experienced fluctuations, with a declining trend in recent years, impacting overall financial performance. Despite this, EBIT and EBITDA margins remain robust, pointing to operational efficiency.

Balance Sheet

The company's balance sheet reveals a high level of debt, with a debt-to-equity ratio exceeding 1. This leverage poses potential risks in volatile markets. However, the return on equity remains relatively strong, demonstrating effective use of equity capital. The equity ratio shows a stable capital structure, reflecting a balanced asset financing strategy.

Cash Flow

The cash flow statement highlights challenges with negative free cash flow in recent years, which could limit investment opportunities. Free cash flow growth has been negative, showing inconsistencies in cash generation. Yet, the operating cash flow to net income ratio remains healthy, indicating good cash conversion from earnings.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
18.38B	19.85B	21.66B	18.26B	14.78B
	Gross Profit
18.38B	14.55B	13.04B	12.16B	12.40B
	EBIT
4.93B	4.47B	4.88B	4.37B	2.90B
	EBITDA
7.17B	6.83B	6.91B	6.27B	3.89B
	Net Income Common Stockholders
2.90B	2.29B	7.80B	2.35B	1.64B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.93B	4.25B	2.77B	3.35B	2.50B
	Total Assets
106.74B	98.33B	92.70B	94.86B	67.22B
	Total Debt
48.36B	47.07B	42.98B	45.47B	31.22B
	Net Debt
47.18B	46.52B	42.82B	45.26B	31.06B
	Total Liabilities
68.92B	68.43B	63.13B	71.00B	47.36B
	Stockholders Equity
37.80B	29.87B	29.54B	23.83B	19.84B
Cash Flow		Free Cash Flow
-1.97B	-514.00M	6.00M	728.00M	-327.00M
	Operating Cash Flow
6.81B	6.94B	6.90B	6.27B	4.46B
	Investing Cash Flow
-10.57B	-7.50B	240.00M	-14.01B	-5.12B
	Financing Cash Flow
4.53B	987.00M	-7.17B	7.77B	750.00M

National Grid Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1063.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 1063 is above the 20-day moving average (MA) of 1046.16, above the 50-day MA of 1027.00, and above the 200-day MA of 966.29, indicating a bullish trend. The MACD of 7.68 indicates Negative momentum. The RSI at 62.12 is Neutral, neither overbought nor oversold. The STOCH value of 85.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:NG.

National Grid Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNA	75 Outperform	£7.90B	6.38	32.10%	1.81%	-24.74%	-63.34%
NG	73 Outperform	£51.30B	16.97	8.35%	5.83%	-7.42%	5.84%
SVT	71 Outperform	£8.18B	35.53	12.73%	5.35%	5.38%	86.34%
SSE	71 Outperform	£19.77B	16.61	12.29%	2.33%	-13.09%	231.40%
Sector *	64 Neutral	$8.62B	10.39	4.24%	4.63%	4.07%	-13.04%
NTEA		£145.16M	1.23		6.20%	―	―
UU	64 Neutral	£7.99B	30.02	13.05%	2.95%	8.61%	―