Citi ups National Grid price target

Citi increased its share price target for National Grid based on the company's shift towards electrification.

The FTSE 100 power network group announced a shift in strategy in March when it agreed to buy Western Power Distribution, the biggest UK electricity distribution business, for £7.8bn to focus on electricity while shedding gas distribution assets.

Citi said it believed investors would continue to back the company's strategy. National Grid shares have gained about 14% since early March. Analyst Jenny Ping raised her price target to £10.03p a share from 970p and restated her 'buy' rating on the stock.

"In our view, the market should continue to support the strategic transformation of NG towards electrification. We continue to see material scope for net zero related network growth in the UK [in] which NG could play a leading role."

Ping also said there was a chance the shares could do better than her target if National Grid wins its appeal to the competition regulator over cuts to returns proposed by the energy watchdog Ofgem.

"We continue to see valuation upside with the stock offering one of the highest regulated asset base[s] and EPS growth among the UK utilities," Ping said in a note to clients.

National Grid shares rose 0.5% to 917.90p at 11:15 BST.