Centrica Share Price Risk/Reward Now Balanced: Here’s Why

JPMorgan downgraded Centrica (LON: CNA) to Neutral from Overweight in a recent note, citing a more balanced risk/reward profile after a prolonged period of outperformance. 

The bank also lowered its price target for CNA to 167p from 170p. The stock is down more than 2% at the open on Monday, trading around the 159.8p mark. However, it is up around 19% this year. 

“Our analysis suggests that Centrica shares present a balanced risk/reward proposition,” JPMorgan analysts wrote, noting the stock has outperformed the sector by approximately 290% since the third quarter of 2020. 

That rally, they said, followed a period when “the market underappreciated the group’s balance sheet strength as well as potential earnings upside from restructuring.”

However, with much of that upside now realised and energy markets stabilising, JPMorgan sees less room for gains. 

They added that with the normalisation of commodity prices and volatility, they see more limited upside for the stock from here.

The bank’s updated 2025 and 2026 earnings forecasts are 11% and 5% below consensus, respectively.

Looking ahead, JPMorgan said Centrica’s interim results on July 24 are likely to confirm “challenging” conditions in both its Energy Markets & Trading division and the UK energy retail market. However, it added that “investors should see these conditions as one-off.”