The UK's plan to overhaul its transmission grid to facilitate more offshore wind connections is a "game-changer" for National Grid's growth outlook, according to Jefferies.
The broker has upgraded its rating for the electricity infrastructure and gas utility to 'buy' from 'hold'.
It believes the next 12-24 months could "dramatically increase visibility on a highly compelling investment case of 10% [per annum] regulated asset base growth through to 2030".
The move helped shares in the firm rise 2.0% on Monday,
Jefferies increased its price target for National Grid to 1,330p per share from 1,000p previously.
The bank explained that in November 2023, National Grid was awarded 17 accelerated strategic transmission incentive projects with a capex opportunity of ''mid-to-high teens'' GBP billion.
This was followed by Ofgem in December 2023 outlining its initial considerations on aligning incentives to encourage grid investments.
"With this, we believe there is now enough visibility to consider the potential upside for NG from higher investments in UK's transmission grid," Jefferies said.
The broker also thinks the US growth outlook is likely to become more visible with NY subsidiaries' rate decisions due this month.
Jefferies argues that National Grid is on track to be a top-ranked regulated growth utility, with visibility improving in the next 12 months.