Centrica Named Morgan Stanley’s Top UK Utilities Pick After Upgrade

Centrica (LON:CNA) has been upgraded to Overweight from Equal Weight by Morgan Stanley, with the investment bank lifting its price target to 210 pence from 175 pence and naming the company its top pick in the UK utilities sector.

Analysts at the bank highlighted Centrica’s strong earnings trajectory and suggested that a cost-cutting plan, which could be announced in early 2026, may provide an additional boost to profitability.

The bank said such measures would support the group’s momentum at a time when investors are increasingly focused on operational efficiency across the energy sector.

Centrica shares, which have risen 24.2% so far this year, have slipped 1.6% on Thursday. The stock has staged a robust rally over the last year or so, climbing over 42%.

The latest bullish view from Morgan Stanley contrasts with JPMorgan’s downgrade in June, when its analysts cut the rating to Neutral from Overweight, citing Centrica’s 290% outperformance against the sector since the third quarter of 2020.

JPMorgan set a lower price target of 167 pence, arguing that the risk/reward profile had become more balanced after the prolonged rally.

Morgan Stanley, however, sees further upside potential. Its analysts believe Centrica remains well placed to deliver earnings growth and shareholder returns, reinforcing confidence in the group’s strategy despite broader sector headwinds.