AnalystConsensusTarget updated the narrative for CNA

Centrica's analyst price target has increased from 180 GBp to 210 GBp, as analysts see upside potential driven by improving renewables prospects and cost-cutting initiatives within the UK utility sector.

Analyst Commentary

Recent analyst research on Centrica highlights optimism around the company's future prospects, as well as some areas where caution may be warranted. The following summarizes key analyst perspectives.

• Bullish analysts have upgraded Centrica, increasing price targets and indicating strong upside potential based on improving fundamentals within the UK utility sector.
• There is renewed optimism about the company’s prospects in renewables, especially as the outlook for onshore wind and solar improves. This positions Centrica to benefit from sector growth.
• Ongoing and anticipated cost-cutting initiatives could further strengthen Centrica’s earnings momentum and underpin cash flow improvement. This could contribute positively to valuation.
• The UK remains a favored geography among sector analysts, which enhances Centrica’s position relative to European peers and drives continued focus on its strategic execution.

• Analysts who remain cautious note that, despite price target increases, Centrica still faces competitive and regulatory challenges specific to the UK market. These could weigh on growth execution.
• Some maintain a Neutral rating, as seen in JPMorgan’s most recent update, reflecting modest upside and potential concerns about sector-wide volatility.
• There is uncertainty around the timing and scale of Centrica’s cost-cutting initiatives. Anticipated plans are not expected to materialize until early 2026, which may delay the expected near-term earnings impact.

What's in the News

• Centrica and X-Energy entered a Joint Development Agreement to deploy Xe-100 Advanced Modular Reactors in the UK. EDF and Centrica's Hartlepool site has been selected as the preferred initial location. The agreement supports potential deployment of up to 6 gigawatts of new nuclear capacity. (Key Developments)
• Centrica announced further life extensions for its Heysham 1 and Hartlepool nuclear power stations, now set to generate electricity until March 2028. This move enhances Britain's energy security and adds approximately 12 TWh to generation volumes between 2026 and 2030. (Key Developments)
• The company recently acquired a 15% equity stake in the Sizewell C nuclear project, committing £1.3 billion. This new 3.2GW station is expected to provide zero-carbon baseload power for the UK for at least 60 years once commissioned. (Key Developments)
• Centrica has completed a significant share buyback, repurchasing over 709 million shares since October 2023 for a total of £991.5 million. (Key Developments)
• An interim dividend of 1.83 pence per share was declared for the first half of 2025, up from 1.50 pence per share for the same period in 2024. (Key Developments)

Valuation Changes

• Fair Value has increased slightly from £1.93 to £1.96, reflecting a modest upward adjustment in expected company worth.
• Discount Rate remains virtually unchanged and is holding steady at approximately 6.82%.
• Revenue Growth expectation has risen marginally from 1.15% to 1.16%.
• Net Profit Margin is essentially stable, edging down slightly from 3.41% to 3.41%.
• Future P/E ratio has risen modestly from 16.07x to 16.29x, suggesting a small upward shift in valuation multiples.