National Grid Transco (NGG) AI Stock Analysis

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National Grid Transco

(NYSE:NGG)

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Outperform 72 (OpenAI - 4o)

Rating:72Outperform

Price Target:

$79.00

▲(10.41% Upside)

National Grid's overall score reflects strong financial performance and strategic investments, tempered by high capital expenditures and liabilities. The earnings call provided positive guidance, supporting future growth, while technical indicators suggest stability without strong momentum.

National Grid Transco (NGG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$69.47B

Dividend Yield4.3%

Average Volume (3M)534.07K

Price to Earnings (P/E)18.1

Beta (1Y)0.20

Revenue Growth-6.02%

EPS Growth7.24%

CountryUS

Employees31,425

SectorUtilities

Sector Strength65

IndustryRegulated Electric

Share Statistics

EPS (TTM)3.06

Shares Outstanding992,263,200

10 Day Avg. Volume484,408

30 Day Avg. Volume534,067

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.68

Enterprise Value/Revenue6.35

Enterprise Value/Gross Profit6.35

Enterprise Value/Ebitda16.29

Forecast

1Y Price Target

$79.00

Price Target Upside10.41% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

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 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

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.

Chart InsightsNational Grid's UK Electricity Transmission segment shows strong growth, reflecting a 57% investment surge, but the UK Electricity Operator faces volatility with a significant recent downturn. The 'Other' segment's losses deepen, possibly due to financial impairments like the £303 million charge on Community Offshore Wind. Despite challenges, the company remains resilient, supported by a robust capital investment plan and favorable regulatory developments. The strategic focus on pure-play networks and secured supply chain for major projects underpins future growth, although regulatory challenges persist in the UK Electricity Distribution segment.

Data provided by:

Main Street Data

National Grid Transco Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Nov 06, 2025

Earnings Call Sentiment Neutral

The earnings call revealed robust financial performance with record capital investments and strategic regulatory progress, particularly in the U.S. However, challenges such as severe weather impacts, project delays, and significant impairments balanced the positive aspects.

Q4-2025 Updates

Positive Updates

Record Capital Investment

National Grid delivered record capital investment of £9.8 billion, a 20% increase from last year, reflecting significant progress across all regulated businesses.

Strong Financial Performance

Underlying operating profit increased by 12% to £5.4 billion at constant currency, driven by increased regulated revenues and flat controllable costs.

Regulated Asset Growth

Helped by the capital investment, National Grid achieved a regulated asset growth of 10.5%.

Dividend Increase

The Board declared a final dividend of 30.88p per share, taking the total dividend for the year to 46.72p, an increase of 3.21% from the previous year.

UK Electricity Transmission Achievements

Investment increased by 57% to £3 billion, with the business delivering a return on equity of 8.3%, outperforming its allowed return by 100 basis points.

U.S. Regulatory Progress

New rates in Massachusetts and New York, including an improved return on equity of 9.5% for the Niagara Mohawk business.

Negative Updates

Challenges from Storm Darragh

Storm Darragh caused substantial damage, impacting the Electricity Distribution segment's performance with costs affecting incentives and revenue.

Community Offshore Wind Impairment

National Grid announced an accounting impairment for its Community Offshore Wind joint venture due to policy uncertainty, totaling £303 million.

Delays in Eastern Green Links 1 Project

There is a 16-month delay in the £2.5 billion Eastern Green Links 1 project, with potential penalties from Ofgem.

Electricity Distribution Return on Equity

Return on equity for UK Electricity Distribution was lower than expected at 7.9%, affected by cost impacts not matching allowances.

Company Guidance

During the call, National Grid provided robust guidance for its future strategy, focusing on significant capital investment and asset growth. The company reaffirmed its commitment to a five-year financial framework, aiming for £60 billion in capital investment, which is expected to drive asset growth of around 10% per annum. This investment is projected to yield an underlying earnings per share (EPS) growth of 6% to 8%, while maintaining a strong balance sheet and delivering an inflation-protected dividend. The company reported a record £9.8 billion in capital investment for the year, a 20% increase from the previous year, contributing to a 10.5% growth in regulated asset base. National Grid also highlighted its achievements in regulatory agreements, securing over 70% of its U.S. investment with regulators and progressing with its strategic infrastructure projects. The company expressed confidence in its ability to deliver its £60 billion investment program and outlined plans for continued engagement with regulatory bodies to refine investment needs and secure future growth.

National Grid Transco Financial Statement Overview

Summary

National Grid Transco demonstrates strong operational efficiency with high gross margins and consistent operating cash flow. However, challenges include fluctuating revenue growth, high capital expenditures impacting free cash flow, and significant liabilities on the balance sheet.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.38B	18.38B	19.85B	21.66B	18.45B	13.66B
Gross Profit	18.38B	14.23B	14.55B	13.41B	11.42B	8.05B
EBITDA	7.17B	7.63B	6.83B	5.59B	6.04B	3.93B
Net Income	2.90B	2.90B	2.29B	7.80B	2.35B	1.64B
Balance Sheet
Total Assets	106.74B	106.74B	98.33B	92.70B	94.86B	67.22B
Cash, Cash Equivalents and Short-Term Investments	6.93B	6.93B	4.25B	2.77B	3.35B	2.50B
Total Debt	47.54B	47.54B	47.07B	42.98B	45.47B	31.22B
Total Liabilities	68.92B	68.92B	68.43B	63.13B	71.00B	47.36B
Stockholders Equity	37.80B	37.80B	29.87B	29.54B	23.83B	19.84B
Cash Flow
Free Cash Flow	-1.97B	-2.50B	-514.00M	573.00M	-119.00M	-804.00M
Operating Cash Flow	6.81B	6.81B	6.94B	6.90B	5.42B	3.80B
Investing Cash Flow	-10.57B	-10.57B	-7.50B	240.00M	-14.22B	-5.21B
Financing Cash Flow	4.53B	4.53B	987.00M	-7.17B	8.82B	1.50B

National Grid Transco Technical Analysis

Technical Analysis Sentiment

Positive

Last Price71.55

Price Trends

50DMA

71.09

Positive

100DMA

71.05

Positive

200DMA

66.15

Positive

Market Momentum

MACD

0.05

Negative

RSI

54.60

Neutral

STOCH

58.56

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 71.55 is above the 20-day moving average (MA) of 70.48, above the 50-day MA of 71.09, and above the 200-day MA of 66.15, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 54.60 is Neutral, neither overbought nor oversold. The STOCH value of 58.56 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
D	75 Outperform	51.49B	20.62	8.39%	4.43%	7.60%	55.99%
AEP	74 Outperform	58.37B	15.80	12.22%	3.41%	5.84%	36.33%
NGG	72 Outperform	$69.47B	18.09	8.31%	4.30%	-6.02%	7.24%
DUK	71 Outperform	95.66B	20.00	9.50%	3.41%	4.07%	9.94%
EXC	68 Neutral	44.53B	16.62	9.61%	3.58%	4.46%	8.68%
SO	66 Neutral	103.99B	24.19	12.59%	3.09%	8.53%	-7.53%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

* Utilities Sector Average

Performance Comparison

NGG

National Grid Transco

71.55

4.86

7.29%

AEP

American Electric Power

109.14

10.91

11.11%

Dominion Energy

60.33

5.77

10.58%

DUK

Duke Energy

123.02

11.19

10.01%

EXC

Exelon

44.09

5.18

13.31%

Southern Co

94.53

7.35

8.43%

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.Date of analysis: Sep 23, 2025