Barclays argues that National Grid (LON:NG) looks the most attractive of the utilities stocks listed in London, WebFG News reports. The comments came as the analysts initiated coverage on the sector.
National Grid’s share price surged in the previous session, gaining 2.03 percent to close at 823.60p, and marginally outperforming the benchmark FTSE 100 index which ended trading 1.58 percent higher at 6,941.63 points. The utility group’s shares have added nearly three percent to their value over the past year, as compared with about an 8.5-percent fall in the Footsie.
Barclays upbeat on National Grid
Barclays gave National Grid an ‘overweight’ rating and a price target of 950p yesterday, arguing that the company looks the most attractive of London-listed utilities. WebFG News quoted the analysts as commenting that the group was attractive for three reasons: that industry regulator Ofgem would “likely improve from here, which could see returns rising,” that the company was “becoming more American but trades at a significant discount to US peers” and that the downside risk was limited “with material upside potential”.
The broker reckons that the company is trading at a combined UK and US 14-percent premium to the regulatory asset base valuation, which implies a UK value at a 14-percent discount to March 2020 regulatory asset base.
Other analysts on FTSE 100 group
The 14 analysts offering 12-month price targets for National Grid for the Financial Times have a median target of 915.00p on the shares, with a high estimate of 1,030.00p and a low estimate of 800.00p. The 14 analysts offering 12-month price targets for the blue-chip group have a median target of 915.00p, with a high estimate of 1,030.00p and a low estimate of 800.00p.