National Grid Shares: Analyst Sees Potential 17% Upside

Bernstein analysts have raised their rating for National Grid (LON: NG.) to Outperform, projecting a potential 17% upside in the company’s share price from Friday’s close. 

The firm told investors in a note that it sees significant growth potential, leading to a new price target of 1,120p, up from 1,040p.

On Friday, the company’s shares closed at 966.2p. At the time of writing on Tuesday, it is trading around the 972.8p mark.

According to Bernstein, National Grid has been undervalued compared to its peers. 

“Despite its US peers seeing a re-rating over the past year, NG (which has c.50% of its assets in the US) has not re-rated and continues to trade at a discount to European regulated network peers,” the firm states. 

Given that roughly 50% of National Grid’s assets are in the US, Bernstein believes the discount is unwarranted. 

“Considering its growth, visibility and returns, we see no reason for the US business to trade at a discount,” the analyst asserts.

Furthermore, Bernstein highlights the attractiveness of National Grid’s UK operations. The firm points to “significant growth and a very constructive regulatory backdrop” in the UK. 

This dual strength in both the U.S. and U.K. markets reinforces Bernstein’s positive outlook.