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Investing.com - Morgan Stanley upgraded Centrica Plc. (LON:CNA) (OTC:CPYYY) from Equalweight to Overweight on Wednesday, raising its price target to GBP2.10 from GBP1.75. The stock, currently valued at $10.73 billion, has demonstrated strong momentum with a 36.27% gain year-to-date and is trading near its 52-week high of $9.39. According to InvestingPro analysis, the company appears fairly valued at current levels.
The upgrade comes as Centrica has committed approximately 70% of its 2024-2028 capital expenditure plan, with recent announcements regarding investments in Sizewell C and Grain LNG projects. InvestingPro data shows the company maintains a strong financial position with a "GREAT" overall health score of 3.15, supporting its ambitious investment plans.
Morgan Stanley projects these known investments will drive 2029 EBITDA of £1.6 billion, which is 8% ahead of current consensus estimates, and expressed confidence that Centrica will deploy the remaining £1.3 billion of uncommitted capital expenditure by 2028.
The investment bank’s new 2029 EBITDA estimate of £1.7 billion incorporates some of this unallocated growth potential, representing 18% upside to consensus estimates and 14% higher earnings at the bottom line.
Morgan Stanley also noted the possibility of a cost-cutting program announcement in early 2026, estimating a 10% EPS compound annual growth rate through 2030 with a 3.3% dividend yield, offering what it calculates as a 13% total shareholder return.
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