Centrica (CNA LN): Upgrade to Buy: Strong EPS growth with upside potential

Research evidence excerpt

Centrica (CNA LN): Upgrade to Buy: Strong EPS growth with upside potential

Equities ● Multi-Utilities

30 July 2026

Upgrade to Buy

◆ Expect 9.5% EPS CAGR in 2025-30e; see inflection in 2027; early

Centrica Energy (CE) downgrade removing key risk

◆ Recent underperformance of the stock does not reflect the strong

strategic progress towards a more rateable asset mix

◆ Upgrade to Buy after recent selloff; lower TP of 200p (vs 205p)

implies c29% upside

Upgrade to Buy: growth profile much improved over past 12

months, underpinning our 9.5% 2025-30e EPS CAGR

We believe Centrica has established a strong track record of transformation, capital discipline,

and execution since 2022. Centrica has made good progress increasing the portion of higher-

quality earnings, reducing legacy positions in upstream gas production and making strategic

investments in more rateable infrastructure assets (Sizewell C, Grain LNG, MAP). By 2030, the

company expects two-thirds of revenue from regulated/contracted businesses vs c40% in 2025.

The Retail transformation program remains in the early stages, and we believe further evidence

is required to support the GBP0.8bn guidance, yet initial progress is encouraging and we would

expect margin benefits to become more apparent from 2027 onwards. While our estimates

remain below guidance, we believe a 2025-30e EPS CAGR of 9.5% remains attractive and

believe risks remain skewed to the upside.

In terms of near-term investment opportunities, we believe a potential decision on Rough

remains the most material catalyst over the next six months. We view the risks here as tilted

towards some form of regulatory agreement, given the focus on energy security and Europe’s

depleted gas inventories. Beyond Rough, the current portfolio is mostly positioned towards