Barclays has taken a constructive view on National Grid, saying the utility’s outlook is driven more by regulation than by short-term demand trends. The broker expects the company’s regulated asset base, or RAB, to grow at a compound annual rate of 10.8% through March 2031. The regulated asset base is the pool of approved network investment on which utilities are allowed to earn a regulated return through customer charges. That growth assumption underpins Barclays’ forecast for National Grid’s earnings per share, which it sees rising 9.6% annually through fiscal 2031 to 123.6 pence.
On that basis, Barclays says its £15 target price implies a price-to-earnings multiple of 12.1. The valuation reflects confidence that National Grid can continue expanding its regulated infrastructure spending and convert that investment into steady, allowed returns over time. For regulated utilities, that framework is often more important than broad economic demand because cash flows are tied to the rulebook rather than to market cycles. Investors therefore tend to focus on whether the company can keep securing permission for major network projects and deliver them efficiently.
Barclays’ analysis places particular emphasis on National Grid’s UK electricity transmission business, where future growth depends on winning approval for large grid investments and executing those projects on schedule and within budget. If the pipeline of approved spending slows, or if project delivery slips, RAB growth would likely weaken. That in turn could reduce the pace of earnings growth and make the valuation case less compelling.
The broker’s view suggests that National Grid’s investment case is anchored in regulated expansion, not in a strong call on Europe-wide energy demand. Instead, the key issue is whether the company can keep building out critical grid infrastructure under the current regulatory regime. The more visible and reliable that process remains, the stronger the case for sustained earnings growth and a premium valuation. If not, the assumptions behind the £15 target and the 12.1 times earnings multiple could come under pressure.
