London, March 16, 2026, 19:25 GMT
National Grid shares fell on Monday after UBS cut the British utility to sell, saying the stock had climbed to valuation levels that in the past were followed by sharp pullbacks. The shares closed 1.27% lower at 1,356 pence, even as the FTSE 100 rose 0.55%. 1
That matters because it hit a stock that had outpaced much of the market this year after investors embraced a bigger growth story in electricity networks. National Grid is still up 18.79% since Jan. 1 and remains about 5% below the 52-week high of 1,429 pence reached on March 2. 1
The rerating gathered pace after National Grid on March 2 extended its five-year framework through fiscal 2031, pledging at least £70 billion of cumulative investment, around 10% annual asset growth and 8%-10% annualized growth in underlying earnings per share. Chief Executive Zoë Yujnovich said the update marked “a further step in accelerating investment” in Britain and the U.S. Northeast. 2
The company also accepted RIIO-T3, Ofgem’s five-year settlement that sets spending rules and allowed returns for UK electricity transmission from April 2026 to March 2031. National Grid said the regime improved visibility around recovering efficient costs and backed plans to nearly double power flows across Britain. 3
Monday’s broker notes showed how divided that growth case has become. UBS downgraded National Grid to sell and lifted its target price to 1,160 pence from 1,100 pence, while Deutsche Bank’s James Brand kept a buy rating and raised his target to 1,430 pence from 1,250 pence. 1
UBS’s concern is valuation. The bank argued the shares now trade at a 57% premium to their regulated asset base, or RAB — the value of the networks on which utilities are allowed to earn returns — a level near the top of its 30-year range. 4
The broker said four earlier periods when the shares traded on similar RAB premia were followed by average falls of 37% over five to 19 months. It also argued the current price implies roughly 8% annual RAB growth through 2041 and around £15 billion of yearly capital spending, above UBS’s own £12 billion forecast. 5
National Grid is still making the opposite case. The company said fiscal 2026 performance remained in line with expectations and that it now expects underlying earnings per share growth of 13% to 15% in fiscal 2027 as allowed revenue steps up under the new regulatory period. 6
The catch is execution. UBS said affordability pressure, planning delays and supply-chain snags could curb how much of that investment plan gets built on time, even after acknowledging the company’s recent operating performance and a more supportive regulatory backdrop. 5
A separate regulatory issue is still around the stock. Ofgem said on March 11 that National Grid Electricity Transmission agreed to pay £20 million into the Energy Industry Voluntary Redress Scheme after admitting historic failures at the Harker 132kV substation in Cumbria, where the watchdog said delays also held up some local generation connections. 7
National Grid is not alone in attracting investors to regulated cash flows. Severn Trent was quoted around 3,149 pence on Monday against a 52-week high of 3,299 pence, while United Utilities traded at 1,352 pence versus a 1,404 pence high, keeping both names near the top of their recent ranges. 8
National Grid’s next scheduled catalyst is annual results on May 14. Monday’s split broker calls suggest the next few weeks may be less about how large the plan is and more about whether the current share price already discounts too much of it. 9
