National Grid Stock Analysis: What the Latest NG Results Mean for Investors

National Grid now expects underlying earnings per share growth for the year to March 2027 to come in slightly above its previous guidance range of 13% to 15%. The entire upgrade comes from one division. In a pre-close update issued by RNS on 5 October 2026, covering the six months to 30 September, the company said National Grid Ventures & Other would deliver around £130m of additional first-half performance relative to expectations, reflecting one-off fair value gains following two capital markets transactions within the NG Partners investment portfolio, plus stronger performance from the interconnectors. The regulated UK and US networks — the businesses that constitute the investment case — performed in line with expectations. The shares rose 12.50p to 1,147.00p, up 1.10%.

That 1.10% is the analysis. An upgrade through the top of a 13%-to-15% earnings growth range would normally be a significant day for a £58bn regulated utility. It was not, and the reason is visible in the composition: a fair value gain is a revaluation of investments held in a portfolio, not cash earned from moving electricity. So the latest update from National Grid leaves the stock roughly where it was on the measures that matter — the regulated asset base, the allowed returns, the capital programme and the balance sheet that funds it — while adding a one-off item to the reported FY27 number. Anyone running a National Grid stock analysis on the back of this release should treat it as a quality-of-earnings event rather than a growth event, and should note that the market, in moving barely 1%, appears to have reached much the same conclusion.

What the update actually said

The pre-close statement covered the first half of National Grid's 2026/27 financial year. Three points carried it.

First, the regulated businesses are performing as planned. National Grid's UK and US networks are the overwhelming majority of group earnings, and they came in line with expectations. Nothing in this release suggests either an operational problem or an operational surprise in the core.

Second, National Grid Ventures & Other beat expectations by around £130m in the first half. The company attributed this to two things: one-off fair value gains following two successful capital markets transactions within the NG Partners investment portfolio, and a stronger performance from the interconnectors business. The fair value element is a revaluation of holdings following transactions that established a market price for them. It is a real gain in the accounting sense and it does reflect genuine value creation inside the portfolio, but it is non-recurring by construction and it is not operating cash from the regulated networks.

Third, the shape of the year is unchanged. Underlying earnings and operating cash flow remain weighted to the second half, and closing half-year net debt is expected to be broadly in line with full-year guidance after accounting for the Joulent investment. Half-year results are due on 5 November 2026.

Context on Joulent matters, because it is the other half of what National Grid Ventures has been doing. National Grid Ventures agreed to invest $1.75bn for a 35% stake in Joulent LLC, a developer of power infrastructure for large-scale US electricity demand. The vehicle for that is Project Kilby, a 2.67GW co-located power facility in West Texas, where National Grid Ventures is partnering with Chevron on a 50/50 basis to supply a Microsoft-operated data centre under a 20-year power purchase agreement, targeting first power in 2028. That investment is incremental to the group's existing five-year capital programme of at least £70bn through 2031, and is being funded from the balance sheet.

Why the market reacted the way it did

Regulated utilities are owned for the predictability of their returns. Investors pay a premium multiple for allowed revenues set by a regulator over a defined period, because those revenues are visible years ahead. The corollary is that the market systematically discounts earnings that do not come from that source — and a mark-to-market gain on an investment portfolio is about as far from regulated allowed revenue as a utility's income statement gets.

So a 1.10% move is not the market missing the point. It is the market correctly separating recurring earnings from non-recurring ones, and declining to capitalise a one-off at the same multiple it applies to the networks.

There is a more interesting way to read the move, though, and it cuts the other way. On a £57.7bn market capitalisation, a 1.10% rise is roughly £635m of added value for a £130m pre-tax one-off gain — several times the gain itself. Some of that will be noise in a single session, and a move this small does not support heavy interpretation. But one plausible explanation is that a portion of the market read the two NG Partners transactions not as a one-off at all, but as evidence that National Grid Ventures can crystallise value from its investment portfolio on demand. On that reading, the £130m is a data point about a capability rather than a windfall — and a capability that recurs is worth considerably more than £130m. The 5 November results are the first opportunity to test which reading holds.

The Openbook read

Growth. Essentially unchanged, and this is the key judgement. Growth in a regulated utility is driven by growth in the regulated asset base and the allowed return on it — in National Grid's case, a capital programme of at least £70bn over five years through 2031, with UK transmission moving from the RIIO-T2 price control into RIIO-T3 and the higher allowed revenue that brings. A £130m fair value gain does not alter any of that. The headline FY27 EPS growth figure will be higher; the underlying growth engine is the same one it was a week ago.

Profitability. Flat on a recurring basis. Reported first-half margins will look better for the Ventures contribution, but a profitability score built on returns from regulated networks should not move on a portfolio revaluation. The genuinely encouraging item inside the £130m is the interconnector performance, because that is operational and repeatable — and it is the smaller part of the figure, which is why it should not be over-weighted either.

Solvency. The live constraint, and the thing to watch most closely at the half-year. National Grid is running one of the largest capital programmes in the UK-listed market while adding $1.75bn of discretionary investment in Joulent on top of it, funded from the balance sheet. The company says closing half-year net debt will be broadly in line with full-year guidance after Joulent, which is reassuring as far as it goes, but it is guidance about a balance sheet that is being asked to do a great deal. With cash flow weighted to the second half, the half-year net debt figure is a genuine data point rather than a formality.

Momentum. Modestly positive. An upgrade is an upgrade, and guidance moving above a range rather than within it is the right direction of travel. But the quality of the driver limits how much momentum it generates, which is precisely what the 1.1% move demonstrated.

Reward/Risk. The profile has not meaningfully changed, and that is the honest conclusion. The reward case rests on the regulated asset base compounding through RIIO-T3 and the US rate cases, with the Ventures portfolio as an option on the AI-driven power demand theme. The risk case rests on funding £70bn-plus of capital expenditure while interest costs remain elevated, and on the possibility that Ventures investments such as Project Kilby, which does not deliver first power until 2028, absorb capital for years before producing returns. A £130m fair value gain changes neither side of that ledger.

The read-across

For UK-listed utilities, the transferable lesson is about where earnings surprises are now coming from. National Grid's regulated businesses did exactly what they were supposed to do; the variance came from an investment portfolio and an unregulated interconnector business. SSE faces a version of the same question, with a large regulated networks business alongside renewables and flexible generation where the earnings are considerably less predictable. Centrica sits further along that spectrum again. Investors comparing these names on our screener should be clear which part of each company's earnings is regulated and which is not, because this release is a reminder that the two deserve different multiples.

For the AI-power theme, National Grid Ventures is becoming a meaningful way to access it from a London listing. Project Kilby pairs a 2.67GW facility with a 20-year power purchase agreement to a Microsoft-operated data centre — contracted, long-dated demand of the kind that has re-rated US power names. The structural difference is that National Grid is doing it inside a regulated utility, where the market's instinct is to apply a utility multiple to everything. Whether that persists is one of the more interesting valuation questions in the UK large-cap space.

For the wider index, a £58bn FTSE 100 constituent nudging guidance higher on a one-off is a reminder of how much of the UK market's reported earnings growth can come from items that do not repeat.

What to watch next

• 5 November 2026 — half-year results. The date that matters. This is where the £130m is quantified precisely, where the split between fair value gains and interconnector performance becomes visible, and where management either confirms or refines the "slightly above 13%-15%" FY27 guidance.
• Closing half-year net debt. The company has guided that it will be broadly in line with full-year guidance after Joulent. Confirmation is the single most useful solvency datapoint on 5 November, given the scale of the capital programme.
• Second-half weighting. Underlying earnings and operating cash flow are guided to the second half. Any sign that the H2 weighting is heavier than expected would matter more than the £130m did.
• RIIO-T3 delivery. UK transmission moving into the new price control is the mechanism behind the 13%-to-15% EPS growth guidance. Progress on allowed revenue and on actually spending the capital at the allowed return is the recurring growth story.
• Project Kilby milestones towards first power in 2028. National Grid Ventures has committed roughly £1bn of capital expenditure over the five years to 2028/29 across its portfolio, including maintenance on its six operational interconnectors, with Joulent on top. Construction progress and any further NG Partners transactions are what determine whether the Ventures division is a repeatable earnings contributor or an occasional one.