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On Thursday, CFRA maintained its “hold” rating. national grid (LON:) (NYSE:NGG) However, the price target has been raised from $60.00 to $70.00. This adjustment reflects a 12-month price target revision based on a forward price-to-earnings ratio of 15.7x, which is in line with the company's five-year forward P/E ratio.
Despite the increase in price target, CFRA revised its earnings per share (EPS) forecast for FY2024 from £3.75 to £3.50 and for FY2025 from £3.80 to £3.65.
National Grid recently published its 'Beyond 2030' report, highlighting the urgency of strengthening the UK's electricity grid to meet growing demand from renewable energy sources. In response to this need, National Grid has announced major investment plans totaling £58 billion. The plans include expanding the offshore power grid and building a new electricity spine running from north to south, allowing electricity produced in Scotland to be transmitted to the north of England.
In addition to the investment in the UK, National Grid will invest more than $4 billion to improve grid infrastructure in upstate New York. These investments are considered consistent with the view that electricity infrastructure is critical to achieving net-zero emissions.
National Grid's business model is highly regulated and provides protection against price and volume risks, which is expected to give it an enhanced defensive profile in the market.
CFRA's hold rating indicates a neutral stance on the stock, and while there are positive aspects to National Grid's investment strategy and business model, investors remain cautious. This suggests that they may want to.
The company's analysis notes that its efforts are well aligned with broader environmental goals and have the potential to bring stability to a market increasingly focused on sustainable and resilient infrastructure development. .
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