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.

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.