LONDON, March 19, 2026, 16:22 GMT
- National Grid shares were down 3.75% at 1,271.5 pence on Thursday after a 2.94% fall on Wednesday. 1
- Jefferies cut the stock to Hold, pointing to a rich valuation, thin near-term regulatory triggers and higher real rates. 2
- A hawkish Bank of England hold pushed gilt yields higher, adding pressure to rate-sensitive utility shares. 3
National Grid shares fell 3.75% to 1,271.5 pence on Thursday, after already dropping 2.94% on Wednesday, when trading volume rose to 10.9 million shares from a 50-day average of 5.8 million. Jefferies cut the stock to Hold from Buy and kept a 1,410 pence price target. 1
The slide matters because it interrupts one of the FTSE 100’s steadier utility trades just days after National Grid lifted its long-term growth targets. Jefferies analyst Ahmed Farman said the shares were on a rich valuation, that the next batch of regulatory triggers looked sparse, and that higher real rates — interest rates after inflation — could sour sentiment. 2
That rates point got sharper on Thursday. The Bank of England held borrowing costs in a unanimous 9-0 vote, traders shifted to price in two quarter-point hikes by year-end and two-year gilt yields jumped to 4.38%; MUFG’s Lee Hardman called the message “more hawkish than the market had been anticipating.” 3
The wider market was weak too. By mid-morning, London’s FTSE 100 was down 1.9% while the energy sector rose 0.9%; Reuters market data later showed the benchmark off about 2.4%, leaving National Grid’s fall looking sharper than the index move alone. 4
The timing is awkward for management. On March 2, National Grid said it would invest at least 70 billion pounds through fiscal 2031 and target 8%-10% annual growth in earnings per share through that period, with 13%-15% growth expected for fiscal 2027; Chief Executive Zoë Yujnovich said the group was “expanding our record levels of investment” through fiscal 2031. 5
Jefferies did not turn outright bearish. But the broker said its 1,410 pence target implied only about 6% total shareholder return and noted the stock had already returned 31% over the past six months, a sign that much of the new growth case was already sitting in the price. 2
National Grid owns the electricity transmission system in England and Wales and runs electricity and gas networks in New York and New England. That regulated mix helps explain why Thursday’s jump in gilt yields landed badly with investors. 6
The bear case is not the whole story. Ofgem in December approved a 28 billion pound investment package for Britain’s energy system over the next five years, National Grid welcomed the decision, and the company said this month it expected to earn more than 9% return on equity across the next UK transmission regulatory period. 7
That leaves the next move tied to two things at once: execution and rates. If gilt yields ease and National Grid delivers on the tougher plan it laid out this month, the shares could settle; if rates stay high and fresh regulatory triggers fail to arrive, the valuation debate that hit the stock this week may deepen. 3
National Grid is due to report next earnings on May 14. Even after Thursday’s drop, the stock remains above its 52-week low of 949.6 pence but below the 1,428.5 pence high. 1
