Jefferies reiterates 'buy' on National Grid, trims price target

Jefferies trimmed its price target on National Grid on Friday as it reiterated its ‘buy’ rating on the energy infrastructure firm.

The broker said the London-listed firm’s stock had underperformed since it announced a near £7bn rights issue at last week’s full-year results.

But it continued: "We see the funding underpinning the new £60bn capex plan. Our updated full-year 2025 earnings per share are 14% lower, but we see 7% 2025-2029 compound annual growth rate, with balance sheet headroom for additional growth capex.

"Regulatory updates due in the next six-to-12 months would improve visibility."

Adding that the blue chip appeared "cheap", Jefferies concluded: "We reiterate our ‘buy’ rating with a new price target of 1,150p, implying 40% total shareholder return."

The previous price target was 1,330p.

As at 1015 BST, shares in National Grid were up 2% at 863.52p.

National Grid said last week that it would use funds raised in the £6.8bn rights issue to upgrade its networks, to enable them to cope with the switch to low-carbon energy in both the US and UK.

It called the planned £60bn outlay, which is due to be spent between 2025 and 2020, a "significant step up" in its investment plans.