National Grid: Sale of US Renewables Assets at a Price in Line With Our Estimates

We confirm our GBX 970 fair value estimate after no-moat National Grid agreed to sell its US onshore renewable business to Brookfield for $1.74 billion, in line with our expectations. Completion is expected in the first half of National Grid's fiscal 2026. We view shares as fairly valued. The deal price reflects that renewables firms with US exposure like EDP Renovaveis have excessively sold off. It's consistent with recent statements by Brookfield's President Connor Teskey about the bright outlook of renewables in the US on the back of data-center-driven electricity consumption growth and large opportunities offered by the discrepancy between public and private valuations for renewables.