CNA: Renewables Momentum and Nuclear Developments Will Drive Further Upside Potential

The analyst price target for Centrica has been increased, now ranging from 179 GBp to 210 GBp. Analysts cite expectations of continued earnings momentum, further upside potential in UK utilities, and an improved outlook for renewables.

Analyst Commentary

Recent analyst research on Centrica highlights both optimistic perspectives and ongoing areas of caution regarding the company's growth trajectory and valuation outlook.

• Several bullish analysts have upgraded Centrica, raising price targets to as high as 210 GBp and positioning the company as a leading pick within UK utilities.
• There is a positive view on Centrica’s exposure to European utilities and renewables, with expectations that improving trends in onshore wind and solar will further support revenue growth.
• Potential cost-cutting initiatives, especially those anticipated in early 2026, are seen as catalysts that could enhance earnings momentum and overall profitability.
• Analysts believe the company’s strong position in the UK makes it well placed to benefit from sector tailwinds and further upside potential.

• Some bearish analysts have shifted to a more neutral stance, citing limited near-term upside potential following recent price appreciation.
• There are concerns around the sustainability of high earnings momentum, suggesting that further execution will be necessary to sustain growth at current valuations.
• The updated price targets, while higher, reflect caution about the pace and durability of renewables growth, particularly in a competitive UK market environment.
• Neutral ratings signal that Centrica’s recent positive developments may already be priced into the shares, raising the bar for future outperformance.

What's in the News

• Centrica and X-Energy entered a Joint Development Agreement to deploy advanced modular reactors in the UK. The Hartlepool site has been identified as the initial preferred location for a planned fleet of up to 6 gigawatts. (Key Developments)
• The Xe-100 Advanced Modular Reactor technology features scalability and increased construction efficiency. It aims to provide both electricity and industrial heat, supporting Britain’s transition to clean energy. (Key Developments)
• Centrica extended the operational life of Heysham 1 and Hartlepool nuclear power stations by an additional year to March 2028, boosting UK energy security. (Key Developments)
• The latest life extensions are projected to add approximately 12 TWh of electricity generation for Centrica between 2026 and 2030, supporting over 4 million homes annually. (Key Developments)
• Centrica’s recent investment in a 15% stake in the Sizewell C nuclear project furthers the company’s commitment to zero-carbon baseload power for the UK’s long-term decarbonisation goals. (Key Developments)

Valuation Changes

• Fair Value per share remains unchanged at £1.96. This indicates analyst assessment of intrinsic value is stable.
• Discount Rate has risen slightly from 6.82% to 7.07%. This suggests a modest uptick in the perceived risk or required return for Centrica.
• Revenue Growth projections are essentially flat, moving marginally from 17.15% to 17.15% (rounded). This reflects steady forward expectations.
• Net Profit Margin estimates remain almost unchanged at 3.41%. This shows little revision in projected profitability.
• Future Price-to-Earnings (P/E) ratio has increased from 16.29x to 16.41x. This points to a modestly higher valuation on prospective earnings.