National Grid plc

LSE:NG. Stock Report

Market Cap: UK£48.0b

National Grid Valuation

Is NG. undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of NG. when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NG. (£9.64) is trading below our estimate of fair value (£12.37)

Significantly Below Fair Value: NG. is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NG.?

Key metric: As NG. is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for NG.. This is calculated by dividing NG.'s market cap by their current earnings.
What is NG.'s PE Ratio?
PE Ratio27.3x
EarningsUK£1.72b
Market CapUK£48.01b

Price to Earnings Ratio vs Peers

How does NG.'s PE Ratio compare to its peers?

The above table shows the PE ratio for NG. vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average13.9x
CNA Centrica
5.7x-10.8%UK£6.1b
TEP Telecom Plus
19.4x11.3%UK£1.4b
SSE SSE
9.9x5.1%UK£18.5b
SRE Sempra
20.8x8.3%US$59.0b
NG. National Grid
27.3x15.5%UK£48.0b

Price-To-Earnings vs Peers: NG. is expensive based on its Price-To-Earnings Ratio (27.3x) compared to the peer average (13.8x).

Price to Earnings Ratio vs Industry

How does NG.'s PE Ratio compare vs other companies in the Global Integrated Utilities Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
NG. 27.3xIndustry Avg. 17.2xNo. of Companies7PE0816243240+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: NG. is expensive based on its Price-To-Earnings Ratio (27.3x) compared to the Global Integrated Utilities industry average (17.2x).

Price to Earnings Ratio vs Fair Ratio

What is NG.'s PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NG. PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.3x
Fair PE Ratio17.2x

Price-To-Earnings vs Fair Ratio: NG. is expensive based on its Price-To-Earnings Ratio (27.3x) compared to the estimated Fair Price-To-Earnings Ratio (17.2x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst NG. forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£9.64
UK£11.25
+16.7%
6.0%UK£12.30UK£9.70n/a15
Nov ’25UK£9.87
UK£11.18
+13.2%
5.8%UK£12.30UK£9.70n/a15
Oct ’25UK£10.48
UK£11.23
+7.2%
6.3%UK£12.30UK£9.70n/a15
Sep ’25UK£9.99
UK£11.06
+10.7%
6.0%UK£12.00UK£9.70n/a15
Aug ’25UK£9.80
UK£11.06
+12.9%
6.0%UK£12.00UK£9.70n/a15
Jul ’25UK£8.85
UK£11.04
+24.7%
5.9%UK£12.00UK£9.70n/a15
Jun ’25UK£8.82
UK£11.30
+28.1%
9.4%UK£13.65UK£9.20n/a15
May ’25UK£10.55
UK£11.91
+12.9%
8.0%UK£13.30UK£10.01n/a15
Apr ’25UK£10.66
UK£11.63
+9.1%
9.3%UK£13.30UK£9.50n/a15
Mar ’25UK£10.35
UK£11.61
+12.2%
8.9%UK£13.30UK£9.50n/a16
Feb ’25UK£10.51
UK£11.40
+8.4%
8.8%UK£13.20UK£9.50n/a16
Jan ’25UK£10.58
UK£11.29
+6.7%
9.6%UK£13.20UK£9.15n/a16
Dec ’24UK£10.33
UK£11.26
+9.0%
9.8%UK£13.20UK£9.15n/a16
Nov ’24UK£9.92
UK£11.28
+13.7%
10.0%UK£13.00UK£9.10UK£9.8717
Oct ’24UK£9.80
UK£11.41
+16.4%
10.2%UK£13.00UK£9.10UK£10.4816
Sep ’24UK£9.86
UK£11.40
+15.6%
10.0%UK£12.80UK£9.10UK£9.9916
Aug ’24UK£10.18
UK£11.37
+11.8%
10.1%UK£12.80UK£9.10UK£9.8016
Jul ’24UK£10.41
UK£11.45
+10.0%
10.5%UK£13.00UK£9.10UK£8.8515
Jun ’24UK£10.56
UK£11.45
+8.5%
10.7%UK£13.00UK£9.10UK£8.8215
May ’24UK£11.45
UK£11.39
-0.5%
10.2%UK£12.75UK£9.10UK£10.5515
Apr ’24UK£10.97
UK£11.07
+0.9%
11.1%UK£12.50UK£8.20UK£10.6616
Mar ’24UK£10.17
UK£11.07
+8.8%
11.1%UK£12.50UK£8.20UK£10.3516
Feb ’24UK£10.19
UK£10.97
+7.7%
11.0%UK£12.40UK£8.20UK£10.5115
Jan ’24UK£9.97
UK£10.91
+9.4%
10.8%UK£12.25UK£8.20UK£10.5813
Dec ’23UK£10.25
UK£10.94
+6.8%
10.4%UK£12.25UK£8.20UK£10.3314
Nov ’23UK£9.63
UK£11.03
+14.5%
13.2%UK£13.79UK£8.20UK£9.9214

Analyst Forecast: Target price is less than 20% higher than the current share price.

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