National Grid has had its rating cut to 'hold' from 'buy' by Deutsche Bank after the strong share price showing from the grid operator in recent months.
Shares are up by a third to 1,178p over the past six months as investors have flocked into businesses with regulated inflation-linked returns.
The utility is now looking fully valued, says the German bank, with rating on the National Grid now a hold, though the target price rises to 1220p.
“National Grid has an SEC yield of 7.4%, broadly in line with our estimate of its cost of equity."
It also trades on a very high 50% premium to RAB (regulated asset base), said the bank.
"Of the UK utilities, only Severn Trent (Buy, 3300p TP from 3100p) looks undervalued within the regulated network space with SEC yields of around 8%."