National Grid Shares Are Up 16% YTD, But UBS Turns Cautious

National Grid (LON: NG.) shares have rallied over the past year, rising 16% year to date and more than 35% over 12 months. But after a re-rating, analysts are starting to question how much upside remains.

According to data from TradingView, 11 of 18 analysts still rate the stock a Buy, with five Hold and two Sell recommendations. The average price target stands at 1,336.5p, implying only about 1.2% further upside from current levels.

Sentiment cooled this week after two firms downgraded the shares on valuation grounds. Jefferies cut its rating to Hold from Buy, keeping its 1,410p price target unchanged.

The firm said the stock’s rapid appreciation has left less room for gains, noting that the regulatory catalysts for the rest of the year “appear thin.”

Those concerns were reinforced by a more bearish call from UBS, which lowered its rating to Sell from Neutral. UBS lifted its price target to 1,160p but argued the risk-reward profile has shifted unfavourably, with the shares trading at a 57% premium to sector peers.

The bank added that the benefits of the forthcoming RIIO-T3 regulatory period are already “fully reflected” in the valuation.

With the stock down nearly 3% over the past month but still sitting near record highs, analysts believe the bar for further outperformance is now considerably higher.