Broker tips: Centrica, Eurowag
By Michele Maatouk
Date: Wednesday 17 Sep 2025
(Sharecast News) - Centrica rallied on Wednesday as Morgan Stanley upgraded the British Gas owner to 'overweight' from 'equalweight' and said it was now its top pick UK utility.
The bank said Centrica's shares aren't even fully valuing its existing business, let alone potential upside from deals including Sizewell C and the Grain LNG terminal.
It said the next stage of the equity story is coming together as management demonstrates the ability to deploy capital to value-accretive projects.
Morgan Stanley noted that Centrica has now committed about 70% of its 2024-2028 capex plan. It said these known investments can drive 2029 EBITDA to £1.6bn, which is 8% above consensus expectations.
The bank lifted its price target on Centrica to 210p from 175p.
Elsewhere, Deutsche Bank downgraded Eurowag to 'hold' from 'buy' following a strong share price performance, but lifted the price target to 110p from 90p.
The bank said Eurowag's first-half results showed another resilient performance despite essentially flat economic growth in Europe in the same period.
"H1'25 net sales grew 15%, driven particularly by strong growth in toll net revenues as a result of CO2 charges in Germany and Austria as well as geographical expansion of its EETS solution," it noted.
Adjusted EBITDA was up 8%, while adjusted cash EBITDA was up 14%, DB said, adding that the group delivered an adjusted cash EBITDA margin of 30.4%, similar to the level of the previous year.
"Cash generation was good, with net debt down to €244m and ND/EBITDA of 2.0x down from 2.6x in H1'24 and 2.3x at the end of FY24," Deutsche said.
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