National Grid plc

LSE:NG. Stock Report

Market Cap: UK£45.4b

National Grid Valuation

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

Valuation Score

3/6

Valuation Score 3/6

  • 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. (£9.29) is trading below our estimate of fair value (£12.36)

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 Ratio26.3x
EarningsUK£1.72b
Market CapUK£45.37b

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 Average13x
CNA Centrica
5.7x-10.0%UK£6.3b
TEP Telecom Plus
18x12.0%UK£1.4b
SSE SSE
9.3x5.2%UK£17.6b
SRE Sempra
19x8.3%US$55.0b
NG. National Grid
26.3x15.7%UK£45.4b

Price-To-Earnings vs Peers: NG. is expensive based on its Price-To-Earnings Ratio (26.3x) compared to the peer average (13x).

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. 26.3xIndustry Avg. 16.5xNo. of Companies10PE0816243240+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: NG. is expensive based on its Price-To-Earnings Ratio (26.3x) compared to the Global Integrated Utilities industry average (16.5x).

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 Ratio26.3x
Fair PE Ratio17.3x

Price-To-Earnings vs Fair Ratio: NG. is expensive based on its Price-To-Earnings Ratio (26.3x) compared to the estimated Fair Price-To-Earnings Ratio (17.3x).

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£9.29
UK£11.23
+20.9%
5.8%UK£12.25UK£9.70n/a15
Dec ’25UK£9.93
UK£11.25
+13.3%
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£9.15UK£9.9316
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

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/22 00:53
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2024/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

National Grid plc is covered by 40 analysts. 14 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Juan RodriguezAlphaValue
Gary HovisArgus Research Company
Dominic NashBarclays