Centrica share price surges as JPMorgan lifts stance

on Jun 23, 2017
Updated: Mar 11, 2020

Shares in Centrica (LON:CNA) have gained ground in London in today’s session as analysts at JPMorgan lifted their stance on the British Gas owner. The move comes with the broker now seeing a cap on energy prices as less likely.

As of 13:17 BST, Centrica’s share price had added 1.21 percent to 208.90p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.25 percent lower at 7,420.89 points. The group’s shares have lost more than four percent of their value over the past year, and are down by some 10 percent in the year-to-date.
JP Morgan Cazenove lifted its rating on Centrica from ‘underweight’ to ‘neutral’ today, raising its price target on the shares from 180p to 205p, noting that the worst-case scenario for the group was now off the table following the Queen’s Speech earlier during the week which did not include any mention of a broader cap on energy prices.

“The UK general election is shaping to be a tipping point for UK supply markets, with a weakened Tory government opting for further consultation on energy market reform rather than pressing ahead with a market-wide price cap,” the analysts pointed out, as quoted by Sharecast, adding that in the Queen’s Speech, the government had proposed to “extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs”. The analysts concluded that as a result, the likelihood of a market-wide cap had fallen.
The rating upgrade comes after earlier this week, Centrica inked a deal to offload two gas-fired powered stations for £318 million in cash as part of its strategy to shift its focus toward its customer-facing businesses and away from power generation.
As of 13:42 BST, Friday, 23 June, Centrica PLC share price is 209.60p.