Broker snap: UBS downgrades National Grid on share price strength

13th Sep 2011 11:57

Following National Grid's year-to-date outperformance, UBS has cut its rating on the UK power and gas grid operator from buy to neutral but maintains its positive stance on the stock.Having outperformed the European utilities sector by over 35% in 2011 so far and reached the target price of 615p (having closed at 616p on Monday), UBS says that with no change to the underlying business, it has downgraded its rating.Nevertheless, "as a regulated high yielding utility with no exposure to euro worries National Grid is a good hedge against current macro concerns," the Swiss broker said. "We continue to see National Grid as well positioned for long term value creation given UK's significant need for new energy infrastructure investments."However, while the restructuring of the US business should provide a catalyst to the shares, the broker thinks that any announcements on this will not coming until the first half of 2012.A 615p target price is maintained.By 11:56 on Tuesday, shares were 2.01% lower at 609.50p.BC