National Grid's First-Half Trading Is in Line With Expectations, Shares Rich

We maintain our fair value estimate of GBX 850 per share along with our no moat rating after National Grid stated on Oct. 18 that trading is in line with expectations, ahead of the release of its fiscal half-year results due on Nov. 18. The current dividend yield is 5.4%, above the 4.5% sector average. However, we expect the dividend to be cut by 20% in fiscal 2024 to avoid a credit downgrade, which would put the company at the lower end of the investment-grade spectrum. All said, we see the shares as overvalued.