Is National Grid’s Share Price Upside Limited From Here?

RBC Capital lowered its rating for National Grid (LON: NG.) from Outperform to Sector Perform in a note to clients this week, lifting its price target slightly to 1,175p from 1,150p following National Grid’s full-year 2025 results.

The bank told investors that it believes there is limited upside at current share price levels and potential regulatory headwinds.

National Grid shares hit a year-to-date high of 11,103p a share on Tuesday. However, on Wednesday it dropped around 1.3%, while in early Thursday trading it has gapped close to 4% lower, currently around the 1,030p per share mark.

“We downgrade National Grid to Sector Perform, despite a strong investment proposition we see more limited upside at the current share price,” RBC analysts said.

The downgrade suggests that while National Grid’s fundamentals remain intact, its valuation may already reflect much of the near-term optimism. 

RBC also flagged potential regulatory uncertainties ahead of the next price control framework. “We do not see an imminent catalyst for the stock with the RIIO-T3 draft determination potentially adding some regulatory risk prior to the final determination in December,” the bank wrote.

The RIIO-T3 framework is set by the U.K.’s energy regulator Ofgem. It is a regulatory price control mechanism for Great Britain's electricity and gas transmission network companies.

It covers the period from April 2026 to March 2031 and aims to incentivize investment in the UK's transmission infrastructure.

While RBC remains constructive on National Grid’s long-term investment case, the firm believes that near-term risk-reward is now more balanced.