National Grid share price rises as Credit Suisse lifts rating on stock

Shares now pricing in ‘fair’ growth and return assumptions

National Grid share price rises as Credit Suisse lifts rating on stock

Shares in National Grid (LON:NG) have advanced in London in today’s session, as Credit Suisse lifted its rating on the stock, arguing that it is now pricing in ‘fair’ assumptions for future growth and returns. The upbeat comments are a boost for the company after Hargreaves Lansdown cautioned earlier this month that an interest rate rise could put pressure on the blue-chip energy group.

As of 14:27 GMT, National Grid’s share price had added 1.17 percent to 876.70p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.01 percent higher at 7,410.30 points. The group’s shares have lost just under 13 percent of their value over the past year, and are down by some 15 percent in the year-to-date.

Credit Suisse lifts stance

Credit Suisse hiked its rating on National Grid from ‘underperform’ to ‘neutral’ today, with the valuation metrics having fallen back to their mid-2014 levels. WebFG News quoted the analysts as explaining that the shares were again changing hands at a 36-percent premium to the company’s combined regulatory asset base and rate base.

The price target, however, was left unchanged at 860p despite the analysts rolling forward their valuation to March 2019, due to the group’s high payout ratio. The broker further pointed to the business’ increasing exposure to the US and away from the UK, reducing its political risk.

Other analysts on National Grid

The 16 analysts offering 12-month price targets for National Grid for the Financial Times have a median target of 1,045.00p on the shares, with a high estimate of 1,243.64p and a low estimate of 860.00p. As of November 25, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.  

As of 14:57 GMT, Monday, 27 November, National Grid plc share price is 877.80p.

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