Centrica PLC (CNA.L): Model Update

Research evidence excerpt

Centrica PLC (CNA.L): Model Update

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23 Jul 2026 16:52:31 ET │ 13 pages

Centrica PLC (CNA.L)

Model Update

CITI'S TAKE

Buy In our view, CNA -10% share price move post results was unwarranted.

While we understand market's disappointment around FY27 Optimisation Price (23 Jul 26 16:30) £1.61

guidance and concerns around the lack of earnings visibility in the long Target price £2.14↓

term, we do not believe there are fundamental problems around the from £2.18

performance of the operating assets and secured growth delivery. While Expected share price return 32.9%

lowering our near term EPS to reflect trading volatility, we continue to see Expected dividend yield 3.7%

a path to c.£1.6bn EBITDA by FY28 or c.14-15p of EPS without additional

Expected total return 36.6% acquisitive growth, even assuming below company's Optimisation

Market Cap £7,437M medium-term guidance. Assuming P/E of 13x and discounting back to

today, we get close to the current share price, which effectively reflect little US$9,947M

of future growth (Rough/M&A) or any forms of bad debt relief. In our view,

any government bad debt support or growth clarity or improving trading

conditions should deliver upside from here. We reiterate our Buy rating,

Jenny PingAC

12m PT now at 214p. +44-207-986-6974

jenny.ping@citi.com

EPS lowered to reflect trading, PT now at 214p (from 218p). We update our forecast

and valuation to reflect 1H results, new FY27 trading guidance, latest commodity

prices and recently announced 20 year CfD for Sizewell B. Our next three years EPS

is c.8% lower on average, mostly to reflect Optimisation performance, in part offset

by higher power prices and spreads on nuclear and CCGTs. Our 12m PT is c.2% lower,

reflecting Optimisation being valued at 3x EBITDA and its negative impact being