This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
Attractive bounce by share price to extend uptrend from Feb lows. Horizontal support at 822p helped to build a reversal of May selloff. Potential for revisit of May/2018 highs. 5.6% forward dividend yield is strong. As a utility, it is deemed defensive, which could help outperforms should markets remain uncertain about a trade war. Broker HSBC (15 Jun) reiterated its Buy on progress at the US business strengthening its defensive attraction.
Defensives such as utilities can get abandoned if equity markets rally and investors shift towards riskier assets (Banks, Miners). Further increases in government bond yields could make NG’s dividend less attractive to income seekers. Regulatory headwinds on the UK utilities sector could hamper the share price.
Analyst consensus is strongly Bullish, with 58% of brokers saying Buy and 42% having a Neutral position. There are no brokers advocating Sell. This is supported by 87% of broker targets suggesting upside from current levels, with a median 12-month target price of 925p, being above our short-term goal of revisiting may highs.
Next Event: AGM, 30 Jul; H2 Earnings Report, 8 Nov
Latest Broker 12-Month Consensus: 55% Buy, 45% Hold, 0% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 2.4 | 2.7 | 6.1 | -1.2 | -10.6 | -29.4 | -6.4 | -9.0 | 4.6 |
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Prepared by Michael van Dulken, Head of Research