Key Takeaways:
- National Grid is executing a historic £60 billion capital program through 2029 to modernize UK and US electricity infrastructure.
- NG stock could potentially reach £16.47 by March 2030, based on valuation assumptions.
- This represents a total return of 43% from today’s price of £11.49, with an annualized return of 9% over the next 4.4 years.
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National Grid (NG) is a UK-based electricity and gas utility serving 20 million customers. The company operates transmission and distribution networks across the UK and the northeastern United States.
It’s capitalizing on unprecedented infrastructure investment needs through a £60 billion capital program that drives 10% annual asset growth.
The utility serves customers through several key businesses.
- UK electricity transmission connects power generation to major population centers.
- The electricity distribution business delivers power to 8 million customers across the Midlands and Southwest England.
- US operations include electricity and gas networks in New York and Massachusetts.
Core operations span high-voltage transmission infrastructure and local distribution networks. The company also operates strategic interconnector assets linking UK power markets to continental Europe. Natural gas distribution serves heating and industrial customers across its US territories.
National Grid delivered strong fiscal 2025 results, with underlying operating profit growing 12% to £5.4 billion. Capital investment reached a record £9.8 billion, up 20% from the prior year.
The company demonstrates solid execution under CEO John Pettigrew’s leadership, and Zoe Yujnovich will take over as CEO in November 2025. Notably, the management team has secured supply chain contracts for over two-thirds of the capital program.
Recent operational highlights include substantial progress across major projects as the company achieved 10.5% regulated asset growth in fiscal 2025.
Teams advanced 350 miles of gas mains replacement while connecting 4 gigawatts of new generation, which includes the UK’s largest battery storage facility.
NG stock has delivered stable returns for decades as a regulated utility. National Grid maintains a disciplined dividend policy tied to UK inflation, providing investors with real income protection.
The company declared a final dividend of 30.88p per share for fiscal 2025, bringing the total annual dividend to 46.72p, representing 3.21% growth, matching UK CPIH inflation.
This inflation-linked approach protects shareholder purchasing power during periods of rising prices while ensuring dividend sustainability throughout the capital investment cycle.
Management reconfirmed its commitment to growing dividends in line with CPIH through 2029, supporting the investment case for income-focused investors seeking inflation-protected yields.
The policy balances capital allocation priorities with consistent shareholder returns. Here’s why National Grid stock could provide attractive returns through 2030.
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What the Model Says for National Grid Stock
We analyzed the upside potential for National Grid stock using several key assumptions. These include the company’s regulated utility model and its £60 billion capital program, which is driving asset growth.
Analysts see an opportunity ahead for NG stock as its investment program provides exceptional visibility through 2029.
Regulatory frameworks already cover 70% of US investments, and the company holds strong positions in UK clean power initiatives and US grid modernization.
National Grid shifted to a pure-play networks strategy after selling non-core assets. The company completed a £7 billion equity raise in 2024, allowing it to secure financing through 2030 while eliminating balance sheet concerns during the intensive capital spending period.
Based on our assumptions, the model shows solid upside. We use 6% annual revenue growth, 21% net income margins, and a 14x P/E multiple. The model projects National Grid stock could rise from £11.49 to £16.47.
That would be a 30% total return, or an 11.5% annualized return over the next 2.4 years.
Our Valuation Assumptions
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for National Grid stock:
1. Revenue Growth: 7%
National Grid delivered a strong fiscal 2025 performance, with underlying operating profit growing 12% driven by higher regulated revenues.
The £60 billion capital program through 2029 creates a 10% annual asset growth rate, and the company earns allowed returns on this expanded rate base.
UK electricity transmission ramped investment to £3 billion, up 57% as strategic projects advance.
US regulatory agreements already cover 70% of planned investments, while Massachusetts has filed its $2 billion electric sector modernization plan.
We used a 6% forecast for revenue growth, which reflects National Grid’s ability to execute its capital programs. The company operates within agreed regulatory frameworks while managing costs effectively.
2. Operating margins: 32%
In fiscal 2025, National Grid’s net income margins remained stable at around 15.6%. This demonstrates the resilient regulated utility business model. The company has strong protection from economic uncertainty.
Operational efficiency helps maintain flat costs despite volume growth. Moreover, regulatory frameworks support allowed returns on invested capital, and their scale benefits reduce unit costs as the capital program advances across major projects.
3. Exit P/E Multiple: 14x
National Grid stock trades at reasonable multiples for a core infrastructure utility. We maintain moderate valuation levels for several reasons.
The unprecedented £60 billion program has already secured supply chain contracts and geographic diversification across UK and US markets reduces political risk.
The company holds regulated monopoly positions in its service territories and has established regulatory relationships spanning decades.
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What Happens If Things Go Better or Worse?
Different scenarios for National Grid stock through 2030 show varied outcomes based on capital program execution and regulatory decisions: (these are estimates, not guaranteed returns):
- Low Case: Regulatory headwinds and execution delays lead to 4% annual returns
- Mid Case: Steady capital deployment and framework agreements produce 9% annual returns
- High Case: Accelerated investment and favorable regulation drive 12% annual returns
Even in the conservative case, National Grid offers attractive returns. The regulated utility model provides earnings stability, and inflation-protected dividends support the income case.
The upside scenario could deliver strong performance if the company exceeds capital deployment targets.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
