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Investing.com - JPMorgan downgraded Centrica Plc. (LON:CNA) (OTC:CPYYY) from overweight to neutral and lowered its price target to GBP1.67 from GBP1.70, citing a balanced risk/reward outlook after significant outperformance.
The British energy company’s shares have outperformed the sector by approximately 290% since the third quarter of 2020, when JPMorgan had identified underappreciated balance sheet strength and potential earnings upside from restructuring.
JPMorgan now sees limited upside potential as much of that value has been realized, alongside the normalization of commodity prices and volatility in the energy markets.
The investment bank’s refreshed earnings per share estimates for 2025 and 2026 are 11% and 5% below Bloomberg median consensus, respectively, with the new price target implying only 2% upside potential.
JPMorgan expects Centrica’s interim results, scheduled for July 24, to confirm challenging conditions in Energy Markets & Trading as well as UK Energy Retail markets, though it notes investors should view these conditions as one-off events.
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