Search Share Prices
Credit Suisse ups target price on National Grid
Analysts at Credit Suisse reiterated their 'neutral' rating on National Grid, but highlighted their "first major upgrade in asset base growth", leading the broker to up its target price on the electricity and gas utility.
Credit Suisse highlighted a small risk if National Grid chooses to cut its dividend at the start of the next set of UK price controls in April 2021, resulting in a 6% reduction in its 2020 earnings per share estimates on the sale of the final 25% of gas distribution network Cadent.
In its investment overview, the broker pointed to asset growth, greater clarity for returns and improvements to its balance sheet as its reasoning to up its target price to 865p from 850p.
For the near-term, Credit Suisse made minimal changes to its estimates.
"We include a £80m gain on a property sale, but this is partly balanced by a large negative adjustment to UK Gas transmission as a result of OFGEM's annual true-up process for revenues," CS noted.
Moving forward, the broker upped its earnings before interest and tax forecasts for the medium-term by £191m and left its dividend estimates unchanged.