Centrica share price: Berenberg lowers stance on British Gas owner

Berenberg Bank has lowered its rating on Centrica (LON:CNA), arguing that 2019 will be ‘another challenging year’ for the British Gas owner, Sharecast reports. The comments come as the FTSE 100 group prepares to update investors on its full-year performance on Thursday.

Centrica’s share price has climbed higher in London in today’s session, having added 1.78 percent to 139.90p as of 14:54 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.54 percent lower at 7,180.60 points. The group’s shares have lost more than eight percent of their value over the past year, as compared with a near one-percent dip in the Footsie.

Berenberg lowers stance on Centrica

Berenberg trimmed its stance on Centrica from ‘buy’ to ‘hold’ yesterday, lowering its price target on the shares from 155p to 140p. Sharecast quoted the analysts as saying that 2019 no longer appeared to be the year in which the uncertainties around the group would start to subside, with operational issues in Centrica’s nuclear and upstream gas units meaning that earnings remained under pressure. The broker, however, noted that a dividend cut did not appear to be the inevitability that the company’s roughly nine-percent yield might suggest.

“The group’s dividend-dictating debt and cash flow targets are achievable and management seems determined to avoid one,” Berenberg pointed out, adding, however, that with 2019 shaping up to be ‘another challenging year,’ it thought it unlikely that Centrica’s valuation would be ready to shake these concerns.

Other analysts on British Gas owner

Citigroup reaffirmed Centrica as ‘neutral’ earlier this month, trimming its price target on the shares from 160p to 144p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 139.92p.

As of 15:09 GMT, Tuesday, 19 February, Centrica PLC share price is 139.90p.