AlphaValue Stays Bullish on Centrica Shares as HY Results ‘a Temporary Setback’

AlphaValue reiterated its Buy rating on Centrica (LON: CNA) after the utility’s first-half results, describing the market reaction as “A temporary setback, not a change to the story,” in a note to clients.

Shares tumbled more than 10% on Thursday after Centrica reported its half-year figures, before edging up 1% on Friday to 163 pence. The stock is down 4% year to date.

Analyst Pierre-Alexandre Ramondenc trimmed the firm’s price target to 221 pence from 233 pence but said the thesis is intact.

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“Despite the EPS adjustment, we remain constructive and reiterate our Buy rating,” Ramondenc wrote.

AlphaValue sees Centrica increasingly recycling cash from retail, optimisation and infrastructure into long-duration, regulated assets, supported by asset rotations within Spirit Energy’s legacy gas portfolio.

The firm also pointed to Sizewell B’s new 70.50-pound-per-megawatt-hour contract for difference, agreed in 2025, which supports a life extension to 2055, alongside Sizewell C’s regulated model and continued smart meter deployment.

AlphaValue described this “de-risking as structurally value-accretive,” arguing there is scope for Centrica to evolve toward “a more diversified, RWE-like utility.” It noted RWE trades at about 19 times earnings versus roughly 12 times for Centrica, highlighting potential for a rerating.

The firm cut its 2027 earnings-per-share estimate by about 12%, reflecting a lower Centrica Energy optimisation EBITDA forecast, while nudging its 2026 retail assumption toward the lower end of guidance and lifting its infrastructure estimate.