Down 16%! Can a £70bn investment plan save National Grid shares?

National Grid (LSE:NG.) shares have been in the headlines again after the utility company unveiled a £70bn investment plan stretching to 2031. For shareholders of the stock, that should be exciting news – but it doesn’t come risk-free.

On one hand, it signals confidence in long-term electricity demand and a clear path for asset growth. On the other, it means heavy spending, rising debt, and execution risk at a time when interest rates and regulation remain uncertain.

So what does this actually mean for someone holding the shares today, and where are the real opportunities and pitfalls?

Why the £70bn plan looks bullish

The company’s updated five-year framework targets around 10% annual regulated asset base growth through 2031. This is backed by at least £70bn of capital investment (roughly £31bn is earmarked for UK Electricity Transmission).

That’s not just maintenance — it’s expansion aimed at connecting offshore wind, upgrading interconnectors, and reinforcing networks for data centres and AI-driven growth.

It’s a conservative target, considering regulated assets have already grown 11.7% in 2026, while capital investment hit a record £11.6bn.

If it all goes ahead as planned, it’ll support continued dividend growth. The 2026 dividend rose 3.8% to 48.49p for the full year, with a final payment of 32.14p paid in July 2026. This follows a favourable policy to grow the dividend in line with UK CPIH, ensuring shareholder income keeps up with inflation.

Put simply, if management delivers, the shares could offer a rare mix of growth and yield in the FTSE 100. But can it fund all this without stretching the balance sheet too far?

The risks investors can’t ignore

Heavy capex comes with heavy financing. Net debt is expected to climb by around £6bn in 2027 as annual investment approaches £13bn. This raises questions about interest costs and credit metrics.

Analyst sentiment reflects that caution. The consensus rating is Hold, with average price targets around 1,335p. UBS maintains a Sell at 1,160p and Jefferies cut its target to 1,300p.

There’s also execution risk as the company simplifies its operating model, cutting its executive committee from 13 to eight members from September 2026 to sharpen accountability.

In other words, the plan is ambitious and the regulatory backdrop is supportive. Whether or not it’s successful remains to be seen.

So what should investors monitor next?

Is the dividend worth the risk?

For long-term holders like myself, the case hinges on whether 10% asset growth and 8%–10% earnings growth can be sustained while keeping the dividend aligned with inflation. I’ll be keeping a close eye on the progress of its RIIO-T3 transmission investment, updates on data centre connections, and any shifts in UK energy policy or financing costs.

If those pieces fall into place, National Grid’s yield and growth profile make it a compelling stock to consider. But until we see real results, the share price may struggle to recover its 52-week high of 1,428p.

The question now is whether the next set of results shows delivery matching the promise. If not, investors may become impatient and start looking elsewhere for their income needs. If the market turns bearish, the high debt level combined with execution risk could put the company under significant pressure.  

But if funding costs are managed well and regulators play ball, this £70bn plan could lead to lasting shareholder value for many years to come.

Should you invest £5,000 in National Grid Plc right now?

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Mark Hartley owns shares in National Grid.