Proactive Investors - Run By Investors For Investors

UBS cuts target price for Centrica, thinks pressure on British Gas owner’s strategy is intensifying

UBS’s analysts pointed out that the FTSE 100-listed firm’s shares have fallen by 19% since its full-year 2018 results in February, making Centrica the worst performer in its sector in the year to date
British Gas bill
But looking back at the numbers, the Swiss bank's analysts said they believe the correction is justified

UBS has reduced its target price for British Gas owner Centrica PLC (LON:CNA) as it thinks pressure on the group’s strategy is intensifying.

The Swiss bank repeated a ‘neutral’ rating on the stock but cut its target for the FTSE 100-listed firm to 110p from 135p, with the shares currently trading at 106p, down 0.7% on Wednesday’s close.

READ: Centrica plunges on dividend worries as British Gas owner warns on 2019 numbers after mixed 2018 results

In a note to clients, UBS’s analysts pointed out that the FTSE 100-listed firm’s shares have fallen by 19% since its full-year 2018 results in February, making Centrica the worst performer in its sector in the year to date.

But looking back at the numbers, they said they believe the correction is justified.

The analysts said they now see Centrica’s 2019 adjusted cash flow coming well below management's target of £2.1bn–£2.3bn.

They pointed out that planned disposals will help, 2020 cashflow looks a little better, and an upside case is still possible.

Yet, the analysts concluded, much still hangs on the group’s pension review and nuclear disposal, where downsides could materialise too.

View full CNA profile View Profile

Related Articles

Q&A, question and answer graphic
January 17 2019
The company is focused on the prolific oil & gas producing Anadarko Basin in the US state of Oklahoma.
oil
February 15 2019
ExxonMobil has made ten discoveries on the neighbouring Stabroek Block with an estimated 5bn barrels of oil
Trinidad
May 07 2019
Output measured 602 barrels of oil per day in the quarter, compared to 607 bopd in the preceding three months.
Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use