National Grid: Small 2H26 Downgrade From a Bullish Analyst

National Grid (NGG) received a downgrade from a Seeking Alpha analyst who had been bullish on the utility for years. The analyst called it a small downgrade for the second half of 2026, trimming conviction without flipping to a sell.

The analyst disclosed no current position in NGG or any derivatives, and said the article was written without compensation beyond Seeking Alpha's standard author program. They also disclosed ownership of European-listed equivalents of all European stocks they cover. That removes the most common conflict for utility stock calls: the dividend-income bias that can make holders reluctant to downgrade even when the risk-reward shifts.

National Grid owns and operates electricity and gas networks in the U.K. and the northeastern United States. Revenue is largely regulated, which typically gives the stock a defensive bid when rates are high. The analyst flagged two risks. First, the U.K. network business faces an Ofgem review that could cap returns during the next price-control period starting in 2026. Second, U.S. transmission spending plans depend on tariffs and equipment availability; cost overruns have been common across the sector. The downgrade suggests the analyst sees the balance tilting enough to reduce exposure, not enough to exit.

The second half of 2026 is still more than a year away. Utility sector earnings revisions tend to lead price moves by 9-12 months, the analyst wrote. If the analyst is early, the stock could drift before the downgrade becomes consensus. If they are late, the risk is already priced. The analyst's longer track record of holding through drawdowns adds weight. They are not a momentum-driven seller.

The next regulatory milestone is the Ofgem final determination, expected in late 2025. That will set the allowed return on equity for National Grid's gas and electricity distribution for the 2026-2031 period. A lower allowed return than the company's own plan would confirm the downgrade thesis. A ruling in line with company guidance would weaken it. Until then, the downgrade is one opinion. It comes from someone who was right on utilities and is now reducing exposure before the next macro catalyst.

AlphaScala's rating for NGG is 56/100, labelled Moderate in the Utilities sector. That places the stock in the middle of the risk-adjusted score range relative to peers. The broader utility sector has rallied this year as rate-cut expectations built. The analyst's downgrade introduces a stock-specific overhang that could separate NGG from the sector run.

The stock traded near $67 before the note. The analyst did not set a new price target. The Ofgem ruling is the next hard date for anyone watching the risk.