National Grid PLC (LSE:NG.) “offers an attractive opportunity” to investors, according to J.P.Morgan, which cited its prospect of almost certain growth as “the backbone of energy transition”.
With the company set to report on Thursday (10 November), the brokers predicted that National Grid’s guidance will be largely unchanged, both in its one-year and five-year outlook, but highlighted reasons it was confident of growth in the coming years.
JPM forecasts 6-8% yearly asset growth until 2026, with this figure potentially increasing alongside increasing demand for energy transition technologies and infrastructure.
The US bank also highlighted that the regulatory framework that oversees 93% of National Grid’s business ensures 'lots of clarity and transparency over its investments and returns'.
A strategic pivot in 2021 meanwhile to increase its focus on electricity over gas has brought an element of certainty over its future growth.
“We prefer both National Grid and SSE to the UK water stocks, given the stronger growth profiles and regulatory clarity in energy networks.”
National Grid's shares rose 2.1% to 975p.