Centrica Shares Gain as JPMorgan Turns Bullish, Citing Efficiency Transformation

Centrica’s shares (LON: CNA) are slightly higher today following an upgrade by JPMorgan, who flip to a bullish rating.

The London-listed stock, trading under the ticker CNA, received an “Overweight” rating from JPMorgan analyst Pavan Mahbubani, who also set a price target of 203p. This positive outlook is underpinned by the company’s disciplined approach to capital allocation. JPMorgan anticipates a period of transformational efficiency beginning in 2026, with expectations of a significant announcement alongside the company’s FY25 results. This anticipation drives JPMorgan’s medium-term estimates above consensus, suggesting a potentially undervalued position. The stock has already demonstrated strong year-to-date performance, with an increase of 20.79%.

The upgrade from JPMorgan arrives amidst a series of analyst evaluations reflecting varied perspectives on Centrica’s trajectory.

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Morgan Stanley upgraded Centrica to “Overweight” in September, increasing the price target from 175 GBp to 210 GBp. This upgrade was fueled by Centrica’s commitment to its 2024-2028 capital expenditure plan, including substantial investments in projects such as Sizewell C and Grain LNG. Morgan Stanley projects that these investments will contribute to a 2029 EBITDA of £1.6 billion, exceeding current consensus estimates by 8%. The firm also expressed confidence in Centrica’s ability to effectively allocate the remaining £1.3 billion of uncommitted capital expenditure by 2028.

Further bolstering the bullish sentiment, Barclays also upgraded Centrica to “Overweight” in October, raising the price target from 180 p to 210p. This adjustment indicated a potential upside of 20.52% from the company’s previous close, reflecting a positive outlook on Centrica’s strategic direction and financial health.

The current upgrade from JPMorgan suggests a revised outlook, potentially mitigating the previously cited concerns about weather and geopolitical pressures. The focus on efficiency transformation and strategic capital allocation signals a longer-term growth perspective, overriding short-term market volatility.