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National Grid (NGG)
:NGG
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National Grid Transco
(NYSE:NGG)
Rating:75Outperform
Price Target:
$81.00
â–²(12.14%Upside)
National Grid Transco (NGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$71.03B
Dividend Yield0.06%
Average Volume (3M)950.48K
Price to Earnings (P/E)18.5
Beta (1Y)0.26
Revenue Growth-6.02%
EPS Growth7.24%
CountryUS
Employees31,425
SectorUtilities
Sector Strength76
IndustryRegulated Electric
Share Statistics
EPS (TTM)3.06
Shares Outstanding992,235,300
10 Day Avg. Volume924,345
30 Day Avg. Volume950,478
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)1.39
Price to Sales (P/S)0.00
P/FCF Ratio-26.64
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$80.40Price Target Upside11.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
National Grid Transco Business Overview & Revenue Model
Company DescriptionNational 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 MoneyNational Grid Transco generates revenue primarily through the regulated transmission and distribution of electricity and natural gas. In the UK, the company operates under a regulatory framework set by Ofgem, which allows it to earn returns based on the value of its regulated asset base (RAB) and its performance against certain targets. In the US, revenue is similarly derived from regulated utility operations, with rates set by state regulators. Key revenue streams include fees charged for the use of its transmission and distribution networks, as well as returns on investments in infrastructure improvements. Additionally, NGG engages in strategic partnerships and joint ventures to optimize its operations and expand its service offerings, contributing to its overall earnings.
National Grid Transco Key Performance Indicators (KPIs)
National Grid Transco Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q4-2025)
| % Change Since: 10.21%|
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
72.23
Price Trends
71.42
Positive
68.25
Positive
64.15
Positive
Market Momentum
0.26
Negative
52.25
Neutral
69.33
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 72.23 is above the 20-day moving average (MA) of 71.98, above the 50-day MA of 71.42, and above the 200-day MA of 64.15, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 52.25 is Neutral, neither overbought nor oversold. The STOCH value of 69.33 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $71.03B | 18.47 | 8.31% | 0.06% | -6.02% | 7.24% | |
73 Outperform | $44.15B | 16.13 | 10.10% | 3.57% | 6.71% | 16.09% | |
73 Outperform | $43.25B | 23.69 | 11.40% | 2.83% | 11.24% | 1.15% | |
71 Outperform | $41.98B | 21.37 | 10.26% | 3.07% | -0.44% | 2.14% | |
69 Neutral | $50.10B | 21.87 | 8.22% | 4.54% | 3.62% | 40.33% | |
68 Neutral | $58.17B | 21.01 | 10.41% | 3.37% | 4.20% | -3.64% | |
67 Neutral | $16.88B | 17.11 | 4.48% | 3.27% | 4.75% | 6.12% |
* Utilities Sector Average
Performance Comparison
NGG
National Grid Transco
72.15
11.30
18.57%
AEP
American Electric Power
109.79
16.83
18.10%
D
Dominion Energy
58.75
8.48
16.87%
EXC
Exelon
43.74
8.37
23.66%
PEG
Public Service Enterprise
86.93
13.19
17.89%
XEL
Xcel Energy
72.78
17.31
31.21%
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.