Centrica Results signal the end of the downgrade cycle - we remain positive and stay OW (1H26 First Take)

研报英文原文证据摘录

Centrica Results signal the end of the downgrade cycle - we remain positive and stay OW (1H26 First Take)

Pavan Mahbubani, CFA AC Europe Equity Research

(44-20) 7134-3056 23 July 2026 C A Z E N O V E

pavan.mahbubani@jpmorgan.com

Investment Thesis, Valuation and Risks

Centrica (Overweight; Price Target: 235p)

Investment Thesis

Centrica has transformed as a group in recent years, with strong free cash flows from the

existing business being deployed into value-accretive long duration infrastructure assets.

We believe that management will be disciplined on capital allocation to customer

technology, new generation assets, and flexible infrastructure. Lastly, we see potential for

incremental efficiencies driving upgrades to medium-term guidance and estimates, which

our analysis indicates is not yet reflected in the share price. We view Centrica as well

positioned as a business, without reliance on elevated commodity prices, volatility or an

accelerated energy transition scenario, and we rate the stock Overweight.

Valuation

Our 235p price target is derived from a sum-of-the-parts valuation.

Risks to Rating and Price Target

Key downside risks include:

• Political risk: The key risk facing UK suppliers at present is political risk, which has

materialised in the form of price regulation for standard variable tariff (SVT) customers.

Further measures to erode CNA's market share, if introduced, would be negative.

• Supply competition: While our base case includes relatively conservative assumptions

around market share, higher-than-anticipated customer attrition would have an impact

on cash flow and value and would be negative for the share price.

• Regulatory risk: Regulation intervention that is harsher or softer than our expectations.