NGG Should I Buy
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National Grid PLC (NGG) does not present a compelling buy opportunity at this time for a beginner investor with a long-term focus. Despite stable profitability and anticipated EPS growth, the stock faces regulatory pressures, additional costs, and mixed sentiment from analysts. The technical indicators are neutral, and there is no strong trading signal to justify immediate action.
The MACD is above 0 but positively contracting, indicating weakening momentum. RSI is neutral at 44.08, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key support and resistance levels are S1: 87.094, Pivot: 88.821, and R1: 90.547. The pre-market price of 86.24 is below the first support level, suggesting potential downside risk.
National Grid anticipates underlying EPS growth of 6%-8% for the current financial year, indicating stable long-term profitability. The company has bullish moving averages, which could support future price appreciation.
Regulatory refund charges and storm costs are expected to negatively impact earnings. Analysts have mixed ratings, with recent downgrades citing valuation concerns and limited upside. The stock fell 1.8% recently, reflecting market concerns over profitability.
National Grid reported an underlying EPS of 73.3 pence for the financial year ending March 2025, showing stable profitability. However, additional costs and regulatory pressures may weigh on future performance.
Analyst sentiment is mixed. Recent downgrades by Goldman Sachs and Jefferies cite valuation concerns, while Morgan Stanley and JPMorgan maintain Overweight ratings with slightly reduced price targets. UBS downgraded the stock to Sell, citing a 57% premium to peers.
