LONDON, March 19, 2026, 16:22 GMT
- Shares of National Grid slipped another 3.75% to 1,271.5 pence on Thursday, following Wednesday’s 2.94% drop.
- Jefferies downgraded the stock to Hold, citing a premium valuation, few imminent regulatory catalysts, and elevated real rates.
- The Bank of England’s hawkish pause sent gilt yields climbing, ratcheting up the strain on utility stocks that are sensitive to rates.
National Grid slipped another 3.75% to 1,271.5 pence on Thursday, deepening a 2.94% decline from the previous session. Trading got busy, with 10.9 million shares changing hands Wednesday—almost double the recent 50-day average of 5.8 million. Jefferies lowered its rating to Hold from Buy, sticking with a price target of 1,410 pence.
This drop is notable—National Grid had only just raised its long-term growth outlook, and the FTSE 100 has counted on the stock as a reliable utility play. But Jefferies’ Ahmed Farman flagged the shares as expensive, with few regulatory catalysts ahead and higher real rates threatening to dent investor appetite.
The rate debate intensified Thursday after the Bank of England kept interest rates steady on a unanimous 9-0 decision. Traders quickly moved to price in two 25-basis-point hikes before the year wraps, while the two-year gilt yield surged to 4.38%. MUFG’s Lee Hardman described the tone as “more hawkish than the market had been anticipating.” Reuters
Broad losses hit the market. Midway through the morning session, London’s FTSE 100 slipped 1.9%, but energy names managed a 0.9% gain. Reuters market figures later pegged the index down nearly 2.4%, making National Grid’s drop stand out even more against the headline decline.
It’s an inconvenient moment for leadership. Back on March 2, National Grid announced plans to pour at least 70 billion pounds into the business through fiscal 2031, setting an ambitious goal of 8%-10% annual EPS growth over that stretch, and expecting a bigger 13%-15% jump for fiscal 2027. Chief Executive Zoë Yujnovich talked up “expanding our record levels of investment” through the end of fiscal 2031. Investing
Jefferies stopped short of turning bearish. The firm pointed to its 1,410 pence target, which suggests roughly a 6% total shareholder return, while highlighting that the stock’s 31% gain across the past six months has likely baked in most of the latest growth narrative.
National Grid controls England and Wales’s electricity transmission system, plus operates electricity and gas networks across New York and New England. That regulated portfolio is part of the reason investors reacted poorly to Thursday’s surge in gilt yields.
There’s more than just the bear case to consider. Ofgem signed off in December on a 28 billion pound plan to upgrade Britain’s energy system over five years—a move National Grid cheered. This month, the company projected a return topping 9% on equity for the upcoming UK transmission regulation window.
The stock’s direction hangs on both execution and interest rates. Should gilt yields fall and National Grid pull off the ambitious steps it announced this month, shares might stabilize. But if rates remain elevated and new regulatory signals don’t materialize, questions swirling around the stock’s valuation this week could linger.
National Grid’s next earnings are scheduled for May 14. After slipping on Thursday, shares are still trading higher than the 52-week low of 949.6 pence, but they haven’t recovered to the year’s 1,428.5 pence peak.
