National Grid shares fall on renewable energy plan and…

National Grid subsequently said it would cut its dividend from 53.1p per share from next year to 45.3p per share from next year to align with the plans, although it assured investors it would increase the dividend payout again in line with inflation at a later date .

Morningstar Key Metrics for the National Network:

• Morningstar Estimated Fair Value: £10.40
• Morningstar Rating:
• Morningstar Economic Moat Rating:
• Morningstar Uncertainty Rating:

In response to the news, Morningstar analyst Tancrede Fulop maintains a fair value estimate for National Grid at £10.40, despite its new five-year strategic plan.

“National Grid intends to sell its liquid natural gas import terminal on the Isle of Grain (in Kent) and its renewable energy assets. In light of current market conditions, we believe it can obtain a good price for these assets,” he says.

“The core business of the UK electricity transmission sector accounts for 65% of planned investment growth. Therefore, its share in total investments increases from 27% in the previous plan to 38% in the new one. The increase is due to the strengthening of the system and new lines connecting new offshore and onshore wind farms.”

However, Fulop believes National Grid could lose some bargaining power when Ofgem, the gas and electricity regulator, imposes a five-year regulatory regime for the UK’s transmission networks, which comes into force in April 2026.

“National Grid requires higher returns due to high interest rates,” he adds.

“Committing to a major acceleration of investment ahead of Ofgem’s final decision expected in early 2026. When asked about this during the conference call, the board said it could not afford to remain uncertain about future investment in the meantime.”

As of 10:19 a.m. on May 24, National Grid shares are trading at 910.60.