National Grid plc (LSE: NG.; ADR: NYSE: NGG) is ending the week with investors focused on one big theme: the “build-the-grid” era is getting real, and regulators are now putting hard numbers and rules on what that build-out can earn—and how fast it can happen.
As of the last market close (Friday, 12 December 2025), National Grid shares were around 1,118.5p. One-week performance was +1.41%, with the stock trading below its 52‑week high of 1,183.5p and above the 52‑week low of 909.8p. Hargreaves Lansdown also lists a trailing P/E of ~20 and a dividend yield ~4.18% (figures can vary by data vendor and timing). [1]
Below is what moved the story this week, what analysts are now forecasting, and what to watch in the week ahead (15–19 December).
National Grid share price: the weekly setup investors are trading
Utilities like National Grid often behave like a strange hybrid of infrastructure growth stock and bond proxy:
- When interest-rate expectations fall, regulated utilities can catch a bid because future cashflows are discounted less harshly and financing can get cheaper.
- When regulators tighten allowed returns or disallow costs, the market tends to get twitchy—because “regulated” does not mean “guaranteed.”
Into mid‑December, National Grid’s price action reflects that tug-of-war: the stock has held up well over the past year, while the market digests a major UK price-control settlement and sweeping grid-connection reforms. [2]
The dominant catalyst: Ofgem’s RIIO‑T3 Final Determination (and what it implies)
1) The headline number: allowed cost of equity (real) at 6.12%
National Grid confirmed it has received Ofgem’s Final Determination for the RIIO‑T3 framework covering National Grid Electricity Transmission (NGET) from April 2026 to March 2031, including a real allowed cost of equity of 6.12% at 60% gearing. [3]
Ofgem’s published decision document also frames RIIO‑3 (including electricity transmission) as the five-year price control period from 1 April 2026 to 31 March 2031. [4]
2) “Investable and workable” becomes the investor-language to watch
National Grid’s message was polite but pointed: it welcomed recognition of the need for significant investment, but will review the full package to judge whether the framework is “investable and workable,” including incentives and the totex (total expenditure) mechanisms. It expects to announce its response in early March 2026, after licence modification consultation steps. [5]
In plain English: the allowed return headline matters, but the incentive architecture and cost-recovery plumbing can matter just as much.
3) The cost allowance reality check: baseline totex below the company submission
Ofgem’s NGET RIIO‑3 Final Determination document includes tables comparing submitted vs allowed baseline totex (in 2023/24 prices). One key comparison shows core baseline totex allowed in the Final Determination is below NGET’s submission (with the document showing, for example, 5,705.7 vs 4,884.2 and a negative percentage difference). [6]
That doesn’t automatically mean “bad outcome”—regulators almost always push down requested allowances—but it’s exactly where analysts will focus when deciding whether returns are attractive after execution risk and financing costs.
UK grid reform news: “zombie projects” get kicked out of the queue
One of the most market-relevant UK energy stories this week wasn’t only about National Grid as a company—it was about the system National Grid operates inside.
Reuters reported that Britain’s National Energy System Operator (NESO) is overhauling grid connections to prioritise ready-to-build generation and storage projects, replacing the old first‑come, first‑served queue that ballooned to 700+ GW of connection requests. Reuters said 283 GW of generation connections were prioritised (132 GW for Clean Power 2030 plus a further 151 GW by 2035), alongside 99 GW of demand projects such as data centres, while 300+ GW of projects would not advance under the new process. [7]
Why that matters for National Grid stock:
- Faster filtering of non-viable projects can make National Grid’s capex planning and delivery sequencing less chaotic.
- It can also accelerate pressure to build faster, which is good for regulated asset growth if cost recovery and incentives are aligned.
Ofgem’s “superhighways” approval: earlier spend now, but potential system savings later
The Guardian reported that Ofgem has approved early investment in three major high‑voltage “superhighway” projects intended to reduce constraint costs (paying wind farms to turn off when the grid is overloaded). The report highlights earlier investment for two Eastern Green Link subsea cables (involving National Grid alongside other network companies) and the GWNC link between Grimsby and Walpole, with Ofgem estimating consumers could be £3bn–£6bn better off versus later delivery—though some costs would be brought forward on bills. [8]
Investor takeaway: the political optics are complicated (“higher bills sooner”), but the system logic is clear: grid constraints are now expensive enough that faster reinforcement can pay for itself—and regulated networks are central to that spend.
Corporate and governance news: audit tender outcome
National Grid announced the outcome of its audit tender process: the board approved the proposed re‑appointment of Deloitte as external auditor to take effect from the financial year ending 31 March 2028, subject to shareholder approval (with Deloitte continuing for FY 2026 and, subject to approval, FY 2027). [9]
This isn’t usually a price-moving catalyst, but it is the sort of “clean housekeeping” item that tends to show up in institutional governance checklists.
Fundamentals and guidance: what National Grid itself is signalling
National Grid’s own forward guidance and regulatory commentary continue to frame the investment case as large, multi-year regulated asset growth funded with a mix of operating cashflow, debt issuance, and ongoing regulatory mechanisms.
1) Capex and balance sheet direction
In its 2025/26 Half Year Results Statement, National Grid states:
- Overall Group capital investment for continuing operations in 2025/26 is expected to be over £11 billion.
- Asset growth is expected to be around 11% (normalised for disposals).
- Net debt is expected to increase by around £1.5 billion (from £41.4bn at 31 March 2025), with regulatory gearing expected to be around 60%. [10]
This is the core “grid buildout” pitch: grow the regulated asset base at scale, while managing gearing within regulatory comfort zones.
2) US regulation: New York and Massachusetts items to watch
The same statement notes several US‑side regulatory developments, including:
- New York PSC actions related to a Long‑Term Gas Plan addendum filing and discussion of reliability benefits tied to the proposed NESE pipeline project (being developed by Williams Transco and due to commission in late 2027, per the document).
- Preparation to file for new rates for the Massachusetts Gas business, with the filing due in January 2026. [11]
For investors, US operations are a double-edged sword: they offer a large regulated runway, but outcomes depend on state-level politics, affordability pressure, and case-by-case regulator judgments.
3) Dividend: upcoming payment date
National Grid’s interim dividend is expected to be paid on 13 January 2026 (per its half-year statement). [12]
For ADR holders, Stock Analysis lists a pay date of Jan 13, 2026 and an ex‑dividend date in late November 2025 for the most recent distribution (data-vendor presentation may differ slightly from the UK line due to ADR mechanics and calendars). [13]
Analyst forecasts and price targets: where the Street is clustering
Analyst targets are not promises from the universe—they’re snapshots of assumptions. But they do shape short-term sentiment and can move a slow-moving utility stock when the narrative shifts.
Here’s what’s surfaced over the past week:
- JPMorgan maintained a Buy rating with a target price stated at 1,250p (MarketScreener summary). [14]
- Bernstein reiterated a Buy view with a target price stated at 1,300p (MarketScreener summary). [15]
- A broader MarketScreener consensus snapshot shows mean consensus: Outperform, with an average target price of ~11.88 GBP versus a last close around 11.18 GBP (i.e., a mid‑single‑digit implied upside in that dataset). [16]
- For the US ADR (NGG), a Nasdaq/Fintel-based writeup cited an average one‑year price target around $81.08 (range $71.80–$90.69) at the time of publication. [17]
What to do with that:
- Targets in the 1,200p–1,300p zone imply the analyst community is not treating RIIO‑3 as a thesis-killer.
- But implied upside in several aggregations is not huge, which is typical when a stock is already priced as a “quality defensive compounder.”
The week ahead (15–19 Dec): what could move National Grid stock next
1) Bank of England decision (Thursday, 18 Dec): utilities care, a lot
The Bank of England’s December policy decision and minutes are scheduled for 18 December 2025. [18]
A Reuters poll reported expectations for a cut to 3.75% at that meeting. [19]
For National Grid, the rate channel matters through:
- the discount rate investors apply to regulated cashflows,
- the cost of new debt for a capex-heavy plan,
- and the overall “bond proxy” trade across utilities.
2) UK macro data: inflation and demand signals
TradingEconomics’ “week ahead” preview flagged UK releases including labour market data, inflation, and retail sales in the coming week. [20]
A surprise rise in inflation can push yields up, often weighing on rate-sensitive defensives; a downside surprise can do the opposite.
3) US rates and liquidity narrative still in play
The Federal Reserve’s December meeting occurred Dec 9–10 per the Fed’s official calendar, with an associated policy statement issued on Dec 10. [21]
Separately, Reuters reported the Fed will begin technical buying of Treasury bills to manage liquidity, with an initial phase around $40 billion (framed as reserve management rather than a policy pivot). [22]
Even for a UK-listed utility, US rates matter because a big slice of National Grid’s business is US-regulated—and global bond moves often travel in packs.
4) Policy and planning noise: the “grid build-out vs affordability” political loop
The UK is simultaneously trying to:
- speed up grid connections (NESO reforms), [23]
- greenlight large grid investment (RIIO‑3 settlements), [24]
- and defend household affordability while moving costs around in time (Ofgem’s superhighway early-investment approach). [25]
That’s fertile ground for headlines—especially when bill impacts are being debated—and utilities can move on rhetoric even when fundamentals change slowly.
Opportunities and risks: the real scorecard behind the headlines
The bull case (why investors keep owning NG.)
- Regulated asset growth runway is large and multi-year, anchored in electrification and decarbonisation policy. [26]
- Grid connection reforms could reduce “paper queue” distortions and help align buildout with viable projects. [27]
- If rates trend lower, the sector can benefit from improved relative valuation support. [28]
The bear case (what can go wrong)
- RIIO‑3 execution economics: allowed returns, incentives, and totex recovery must work in practice—not just in headline parameters. [29]
- Political affordability pressure can intensify when large upfront investment is approved, even if it reduces system costs later. [30]
- Balance sheet and financing discipline matter when capex is “over £11bn” in a single year and debt is expected to rise. [31]
- US regulatory calendars (rate cases and infrastructure approvals) can deliver wins—or delays. [32]
Bottom line: National Grid’s near-term story is regulation + rates + delivery pace
Going into the week ahead, National Grid stock is likely to trade less on “earnings surprises” (there aren’t obvious ones scheduled) and more on:
- Bond yields and central bank messaging (BoE in particular), [33]
- follow‑through on UK grid reforms, [34]
- and ongoing digestion of the RIIO‑T3 / RIIO‑3 final determination details and what they mean for long-run investability. [35]
National Grid is, in essence, a bet that the UK and US will keep paying—through regulated frameworks—for the grid expansion they now desperately need. The market is on board with that direction. The argument now is over the price, the pace, and who eats the execution risk.
References
1. www.hl.co.uk, 2. www.hl.co.uk, 3. www.investegate.co.uk, 4. www.ofgem.gov.uk, 5. www.investegate.co.uk, 6. www.ofgem.gov.uk, 7. www.reuters.com, 8. www.theguardian.com, 9. www.investegate.co.uk, 10. www.nationalgrid.com, 11. www.nationalgrid.com, 12. www.nationalgrid.com, 13. stockanalysis.com, 14. www.marketscreener.com, 15. www.marketscreener.com, 16. www.marketscreener.com, 17. www.nasdaq.com, 18. www.bankofengland.co.uk, 19. www.reuters.com, 20. tradingeconomics.com, 21. www.federalreserve.gov, 22. www.reuters.com, 23. www.reuters.com, 24. www.ofgem.gov.uk, 25. www.theguardian.com, 26. www.nationalgrid.com, 27. www.reuters.com, 28. www.reuters.com, 29. www.investegate.co.uk, 30. www.theguardian.com, 31. www.nationalgrid.com, 32. www.nationalgrid.com, 33. www.bankofengland.co.uk, 34. www.reuters.com, 35. www.investegate.co.uk
