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National Grid (NGG)
:NGG
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National Grid Transco
(NYSE:NGG)
Rating:72Outperform
Price Target:
$79.00
â–²(10.40% Upside)
National Grid Transco (NGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$70.63B
Dividend Yield4.3%
Average Volume (3M)776.80K
Price to Earnings (P/E)18.2
Beta (1Y)0.22
Revenue Growth-6.02%
EPS Growth7.24%
CountryUS
Employees31,425
SectorUtilities
Sector Strength87
IndustryRegulated Electric
Share Statistics
EPS (TTM)3.06
Shares Outstanding992,246,030
10 Day Avg. Volume636,015
30 Day Avg. Volume776,803
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.65
Enterprise Value/Revenue6.35
Enterprise Value/Gross Profit6.35
Enterprise Value/Ebitda16.29
Forecast
1Y Price Target
$79.70Price Target Upside11.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
National Grid Transco Business Overview & Revenue Model
Company DescriptionNational Grid Transco (NGG) is a leading energy company focused on the transmission and distribution of natural gas and electricity across the United Kingdom and the northeastern United States. The company operates essential infrastructure, including high-voltage electricity transmission lines and extensive gas pipeline networks, ensuring reliable energy supply to millions of customers. NGG is committed to sustainability and innovation, investing in renewable energy sources and advanced technologies to improve energy efficiency and reduce carbon emissions.
How the Company Makes MoneyNational Grid Transco generates revenue primarily through regulated energy transmission and distribution services. The company earns money by charging utility companies and consumers for the use of its infrastructure, which is regulated by government agencies to ensure fair pricing. Key revenue streams include transmission tariffs for electricity and transportation charges for natural gas, which are determined based on the volume of energy transported and the prevailing regulatory frameworks. Additionally, NGG benefits from strategic partnerships with energy producers and technology providers, which enhance its service capabilities and expand its market reach. The company's investment in renewable energy projects and energy efficiency initiatives also contributes to its revenue by aligning with growing demand for sustainable energy solutions.
National Grid Transco Key Performance Indicators (KPIs)
Any
Operating Profit by Segment
Reveals the profitability of each business segment, highlighting which areas are driving earnings and where there may be challenges or opportunities for growth.
Reveals the profitability of each business segment, highlighting which areas are driving earnings and where there may be challenges or opportunities for growth.
Data provided by:
Main Street Data
Main Street DataNational Grid Transco Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q4-2025)
| % Change Since: 9.19%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong start to National Grid's five-year plan with record capital investments and significant improvements in operating profit and return on equity. However, substantial impairments and regulatory challenges in specific projects and areas indicate ongoing difficulties. The company's stability and resilience were emphasized amidst these mixed outcomes.Q4-2025 Updates
Positive Updates
Record Capital Investment
National Grid delivered record capital investment of £9.8 billion, 20% higher than last year, driving regulated asset growth of 10.5%.
Strong Operating Profit Increase
Underlying operating profit increased by 12% to £5.4 billion at constant currency, reflecting robust operational performance and increased regulated revenues.
Secured Supply Chain for Major Investments
Over two-thirds of the £60 billion capital investment is now secured, including 12 onshore and two offshore projects for ASTI, and significant progress in New York's $4 billion Upstate Upgrade.
UK Electricity Transmission Investment Surge
Investment in UK Electricity Transmission increased by 57% to £3 billion, driven by major substation upgrades and connectivity projects.
Positive Regulatory Developments
Achieved over 70% agreement on U.S. investments with regulators and saw favorable policy movements in both the U.S. and UK that support investment plans.
Return on Equity Improvements
Return on equity for New York improved to 8.7%, and a joint proposal in April increased Niagara Mohawk's return to 9.5%.
Negative Updates
Financial Impairment on Community Offshore Wind
An accounting impairment led to a £303 million charge due to short-term policy uncertainty impacting the U.S. offshore wind industry.
UK Electricity Distribution Challenges
Return on equity was lower than expected at 7.9%, impacted by Storm Darragh and lower-than-anticipated allowances from Ofgem's real price effects mechanism.
Delays in Eastern Green Links 1 Project
The £2.5 billion Eastern Green Links 1 project is 16 months late, with Ofgem considering penalties for the delay.
Company Guidance
During the call, National Grid provided comprehensive guidance for its future financial and operational trajectory. The company outlined a £60 billion capital investment plan focused on pure-play networks, aiming to drive asset growth of around 10% per annum and underlying earnings per share growth of 6% to 8%. The plan includes a £7 billion equity raise to secure funding through 2031. In the past year, National Grid achieved a record capital investment of £9.8 billion, 20% higher than the previous year, and delivered an underlying operating profit increase of 12% to £5.4 billion. The company also reported a regulated asset growth of 10.5% and declared a final dividend of 30.88p per share, bringing the total dividend for the year to 46.72p, an increase of 3.21%. The guidance reaffirmed its financial framework for 2024-2029 with expected EPS growth at the lower end of 6% to 8%, driven by planned investments over £11 billion for the next year, alongside a strategic focus on regulatory engagements and capital delivery across the UK and U.S. segments.National Grid Transco Financial Statement Overview
Summary
National Grid Transco shows strong operational efficiency with healthy gross and EBITDA margins. However, challenges in revenue growth and high capital expenditures impact financial flexibility. A stable asset base is overshadowed by significant liabilities, necessitating cautious financial management.Income Statement
National Grid Transco shows a strong gross profit margin consistently above 75%, indicating effective management of production costs. However, net profit margin fluctuates, with a significant drop in recent years, reflecting increased expenses or reduced revenue efficiency. Revenue growth is inconsistent, peaking in 2023 but declining in 2024 and 2025, which may signal market pressures or strategic shifts impacting sales. EBIT and EBITDA margins are healthy, suggesting operational efficiency, though EBIT margin has varied, warranting attention to operational costs.75
Positive
Balance Sheet
The company's debt-to-equity ratio indicates a moderate level of leverage, typical for a regulated utility, but requires monitoring to ensure it doesn't impede future financing. The return on equity has shown variability, with a notable peak in 2023, suggesting fluctuating profitability relative to shareholder investments. The equity ratio is stable, reflecting a solid asset base, but continued large liabilities could pose risks if not managed carefully.70
Positive
Cash Flow
Operating cash flow remains strong, consistently covering net income, which is a positive sign of cash-generating capacity. However, the free cash flow is negative in most years, indicating heavy capital expenditures that exceed operating cash flow, potentially affecting liquidity. The free cash flow to net income ratio also suggests challenges in converting profits into free cash flow, highlighting a need for careful capital allocation.65
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 18.38B | 19.85B | 21.66B | 18.45B | 13.66B |
| Gross Profit | 14.23B | 14.55B | 13.41B | 11.42B | 8.05B |
| EBITDA | 7.63B | 6.83B | 5.59B | 6.04B | 3.93B |
| Net Income | 2.90B | 2.29B | 7.80B | 2.35B | 1.64B |
Balance Sheet | |||||
| Total Assets | 106.74B | 98.33B | 92.70B | 94.86B | 67.22B |
| Cash, Cash Equivalents and Short-Term Investments | 6.93B | 4.25B | 2.77B | 3.35B | 2.50B |
| Total Debt | 47.54B | 47.07B | 42.98B | 45.47B | 31.22B |
| 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 | -2.50B | -514.00M | 573.00M | -119.00M | -804.00M |
| Operating Cash Flow | 6.81B | 6.94B | 6.90B | 5.42B | 3.80B |
| Investing Cash Flow | -10.57B | -7.50B | 240.00M | -14.22B | -5.21B |
| Financing Cash Flow | 4.53B | 987.00M | -7.17B | 8.82B | 1.50B |
National Grid Transco Technical Analysis
Positive
71.56
Price Trends
71.71
Negative
69.83
Positive
64.71
Positive
Market Momentum
-0.13
Positive
50.66
Neutral
28.67
Neutral
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 71.56 is below the 20-day moving average (MA) of 71.63, below the 50-day MA of 71.71, and above the 200-day MA of 64.71, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 50.66 is Neutral, neither overbought nor oversold. The STOCH value of 28.67 is Neutral, 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
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $45.06B | 16.93 | 9.87% | 3.54% | 4.46% | 8.68% | |
74 Outperform | $60.36B | 16.53 | 13.03% | 3.30% | 5.84% | 36.33% | |
72 Outperform | $43.32B | 21.92 | 12.19% | 2.81% | 13.73% | 19.94% | |
72 Outperform | $70.63B | 18.20 | 8.31% | 4.30% | -6.02% | 7.24% | |
72 Outperform | $52.32B | 21.18 | 9.29% | 4.36% | 7.60% | 55.99% | |
72 Outperform | $42.81B | 20.08 | 10.65% | 3.09% | 1.20% | 7.99% | |
67 Neutral | $17.91B | 18.75 | 8.12% | 3.40% | 7.32% | 12.41% |
* Utilities Sector Average
Performance Comparison
NGG
National Grid Transco
71.56
9.94
16.13%
AEP
American Electric Power
112.86
19.36
20.71%
D
Dominion Energy
61.18
7.75
14.50%
EXC
Exelon
44.65
8.41
23.21%
PEG
Public Service Enterprise
86.80
8.60
11.00%
XEL
Xcel Energy
72.39
14.39
24.81%
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.