London, March 16, 2026, 19:25 GMT
UBS slapped a sell rating on National Grid on Monday, sending the British utility’s shares down 1.27% to 1,356 pence. The analysts flagged that recent gains had pushed the stock up to historically risky valuation territory—levels that have tended to precede steep drops. This move came as the FTSE 100 edged up 0.55%.
This one stings, targeting a stock that had surged past much of the market as investors piled into the electricity networks growth narrative. National Grid is still showing an 18.79% gain since Jan. 1, now sitting roughly 5% off its 52-week peak of 1,429 pence from March 2.
Momentum picked up after National Grid pushed its five-year plan out to fiscal 2031 on March 2, promising at least £70 billion in total investment. The company flagged about 10% annual asset growth and projected 8%-10% annualized gains in underlying EPS. Chief Executive Zoë Yujnovich called the announcement “a further step in accelerating investment” across Britain and the U.S. Northeast. Investegate
The company has signed on to RIIO-T3, Ofgem’s five-year framework outlining spending limits and permitted returns for UK electricity transmission between April 2026 and March 2031. National Grid pointed to greater clarity on recouping efficient costs under the new regime, which also supports its ambition to almost double Britain’s power transfer capacity.
Broker notes on Monday highlighted just how split opinion is on the growth story. UBS cut National Grid to sell, but interestingly took its target price up to 1,160 pence from the previous 1,100 pence. On the other side, James Brand at Deutsche Bank stuck with his buy call and bumped his target to 1,430 pence, up from 1,250 pence.
UBS is flagging valuation as the main issue. According to the bank, shares are sitting at a 57% premium to their regulated asset base, or RAB—that’s essentially the value on which utilities can earn returns. That’s hovering close to the upper end of the past 30 years.
The broker flagged four past stretches when the shares carried similar RAB premia—each time, the stock dropped an average 37% over anywhere from five to 19 months. The current price, it said, bakes in about 8% annual RAB growth through 2041 and yearly capital spending near £15 billion, running hotter than the £12 billion UBS projects.
National Grid isn’t budging from its stance. The company reaffirmed that fiscal 2026 is tracking with its forecasts, and pointed to a 13% to 15% underlying EPS growth target for fiscal 2027, citing higher allowed revenue in the upcoming regulatory cycle.
Here’s the rub: execution. UBS flagged that affordability constraints, planning hold-ups, and lingering supply-chain issues might slow down how much of the investment plan actually materializes on schedule. That’s despite noting the company’s improved operating results and a regulatory environment that looks a bit friendlier lately.
The stock faces another regulatory snag. Back on March 11, Ofgem announced that National Grid Electricity Transmission will pay £20 million to the Energy Industry Voluntary Redress Scheme, admitting to past failures at the Harker 132kV substation in Cumbria. According to the watchdog, delays at the site also stalled some local generation connections.
National Grid isn’t the only name finding buyers for its steady, regulated returns. Severn Trent hovered near 3,149 pence on Monday, not far from its 52-week high of 3,299 pence. United Utilities changed hands at 1,352 pence, just under its own high of 1,404 pence—leaving both stocks trading close to the upper end of their recent bands.
National Grid is set to report annual results on May 14. Monday brought a split among brokers, leaving the focus for now less on the plan’s size and more on whether the shares have already baked in too much.
