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On Monday, CFRA analyst Lee Zhao Jun downgraded Centrica Plc (LON:CNA). stock from Buy to Hold and adjusted the price target to GBP1.60 from the previous GBP1.70. The revision comes amidst a broader assessment of the company’s financial outlook and market position.
Centrica (OTC:CPYYY), listed on the London Stock Exchange (LON:LSEG) as CNA:LN and over-the-counter as CPYYY, has seen a shift in its stock rating after the analyst’s review. While the specific reasons behind the downgrade were not detailed, such adjustments typically reflect a change in expectations about a company’s future earnings potential, competitive landscape, or macroeconomic factors affecting its industry.
In contrast to the Centrica downgrade, CFRA has expressed a more optimistic view on ITV (LON:ITV) Plc. The firm has raised its 12-month target price for ITV to GBP0.93 from GBP0.84. This new target is based on a projected 2025 P/E ratio of 9.0x, which represents a 12% premium compared to its five-year average of 8.0x. The upgrade is driven by the potential for a takeover bid from Banijay, a rival group showing increased interest in ITV.
The CFRA analyst believes that ITV shares are currently undervalued, especially when considering the strength of its assets, notably the Studios business. The Studios segment has a proven record of success in producing both scripted and unscripted content. The positive outlook for ITV is further supported by its robust financial profile, characterized by strong cash generation and a solid balance sheet.
CFRA also forecasts further improvements in ITV’s profitability. These expectations are partly based on a moderation in content spending following significant investments in ITVX, as well as continued savings from cost reduction initiatives. The firm’s 2026 EPS forecast for ITV has been lifted to GBP0.11 from GBP0.10, while maintaining the 2025 EPS projection.
The differing directions of CFRA’s stock rating updates for Centrica and ITV highlight the varying conditions and prospects within the media and utilities sectors. As the market digests these updates, investors will be watching the performance of both companies closely.
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