Shares in Centrica (LON:CNA) have fallen into the red in today’s session, as Credit Suisse lowered its rating on the British Gas owner. Proactive Investors quoted the analysts as pointing to a ‘tight’ outlook for the group’s dividend.
As of 13:47 GMT, Centrica’s share price had given up 1.72 percent to 131.80p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.32 percent lower at 6,879.29 points. The group’s shares have lost about 5.5 percent to their value over the past year, as compared with about an 11-percent fall in the Footsie.
Credit Suisse trims stance on Centrica
Credit Suisse lowered its rating on Centrica to ‘neutral’ today, trimming its price target on the shares from 180p to 155p. Proactive Investors reports that the analysts cut their earnings per share (EPS) forecast for the FTSE 100 group by nine percent for 2018 to reflect a weaker UK home market and lower hydrocarbon production volumes.
The broker added that an eight-percent price rise expected early next month would “on balance be a negative for the stock” while the sale of Centrica’s 20-percent stake in British Energy was ‘unlikely’ this year due to a standstill in the capacity market and uncertainty on the tax on carbon dioxide emissions. Credit Suisse reckons that those factors, as well as a pension deficit, left the company’s dividend ‘sustainable, but looking tight,’ adding that any more adverse impacts to the EPS could put it at risk.
Other analysts on British Gas owner
Morgan Stanley reaffirmed the FTSE 100 group as an ‘underweight’ earlier this month, with a price target of 105p on the shares, while Kepler Capital Markets continues to see the company as a ‘buy’. According to MarketBeat, the British Gas owner currently has a consensus ‘hold’ rating and an average price target of 147.50p.