Centrica Shares Upgraded to Buy After 29% Selloff, Sees 2027 Earnings Inflection

HSBC upgraded Centrica (LON: CNA) to Buy from Hold on Thursday, telling investors that a sharp share-price decline has opened up an attractive entry point despite the broker trimming its price target.

HSBC lowered its target to 200 pence from 205 pence on reduced estimates, but moved to a positive stance with the stock down 29% from its April highs.

While the firm expects only modest earnings growth in 2026, it sees an inflection in 2027, with earnings per share growing 12% year over year, according to the analyst.

The upgrade adds to a run of improving sentiment on the stock. Kepler Cheuvreux lifted Centrica to Buy from Hold earlier in the week, with a 180-pence target. In March, Citi raised the shares to Buy from Neutral, citing the company’s positioning to benefit from UK government support for low-carbon generation amid higher gas prices.

Not all brokers have been moving in the same direction, however. Also in March, Morgan Stanley downgraded Centrica to Equal Weight from Overweight, pointing to a strong prior run, the completion of its buyback without an extension and a lack of near-term catalysts, even as it flagged an attractive evolution in the company’s business mix and scope for double-digit EPS growth toward the end of the decade.

Centrica shares closed down 1.8% on Thursday at 152.6 pence, leaving them 10.1% lower year to date. So far on Friday, the stock is up 1% at 154.15p.

HSBC’s new target implies meaningful upside from that level, should the expected 2027 earnings acceleration materialise.