Citi reiterates 'buy' on Centrica, ups price target after 'stellar' results
By Michele Maatouk
Date: Friday 21 Feb 2025
(Sharecast News) - Citi reiterated its 'buy' rating on British Gas owner Centrica on Friday and lifted its price target to 187p from 174p following the company's "stellar" results a day earlier.
The bank said the results ticked boxes on shareholder returns, more efficient use of balance sheet, earnings visibility and stability, "as well as (partially) clarity on growth".
"While we wait for further details around nuclear investment opportunities (Sizewell/Hinkley), Rough and potentially other acquisitive opportunities, investors are rewarded with 16% (4% dividend yield plus 12% share buyback) guaranteed cash return in FY25, the best in the sector," it said.
"In addition, already identified investments (gas peakers and meter assets) opportunities should help to mitigate much of the void left by a normalisation of commodity prices."
Citi also said that further investments opportunities should add to earnings.
"We continue to see valuation upside, with higher net cash position, lower pension liabilities, value creative investment and credible earnings trajectory boosting our 12-month price target to 187p/share."
At 1010 GMT, the shares were up 3.3% at 148.35p.
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