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Will National Grid Shares Rise? These Analysts Believe So

Sam Boughedda trader
Updated 13 Jun 2024

Despite the almost 10% decline in shares of National Grid (LON: NG.) (NYSE: NGG) this year, analysts at both Goldman Sachs and Citi are bullish on the stock. 

In a client note Wednesday, Goldman Sachs raised its rating for the London-based utility company to Buy from Neutral, increasing its target to 1,059p per share, up from 1,007p. 

The investment bank noted that the equity issuance and dividend re-basing resulted in a negative market reaction. However, they feel the company's investment program announcement removes questions regarding funding and leverage.

As a result, Goldman Sachs now believes National Grid's equity raise created an attractive entry point for the stock, highlighting that increasing power demand could push underappreciated upside for the company as investments into power networks continue to build. 

Following the upgrade on Wednesday, National Grid shares climbed 1.7%.

Meanwhile, at the start of June, Citi also raised its rating for National Grid to Buy from Neutral, increasing the share price target to 985p a piece, up from 920p. 

The bank sees an attractive set-up, noting the constructive political and regulatory outlook and the company's materially improved balance sheet. 

Citi believes National Grid's shares trade at an attractive valuation for its underlying assets that are meeting regulatory and financial targets, albeit with the capacity to improve.

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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.