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Centrica share price dips as Jefferies points to downside risks to earnings estimates

Shares in Centrica (LON:CNA) have fallen into the red in today’s session as analysts at Jefferies pointed to downside risks to consensus earnings estimates for the British Gas owner, even as they reiterated their ‘buy’ rating on the shares. The comments came in the wake of the FTSE 100 group’s interim results yesterday when the company posted a drop in cash flow and profits and announced that its chief financial officer Jeff Bell will be standing down from his position later in the year.

As of 14:20 BST, Centrica’s share price had given up 2.52 percent to 145.00p. The stock is underperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 0.93 percent to 7,676.33 points so far today amid renewed worries over the trade relations between the US and China.

Jefferies points to downside risks

Jefferies reaffirmed Centrica as a ‘buy’ today, with a price target of 165p on the shares. WebFG News, however, quoted the analysts as saying that several aspects of the group’s results ‘implied’ downside risks to consensus estimates for its earnings per share in fiscal year 2018. Those weak points include the British Gas owner’s slower-than-expected recovery in its North American business, weak first half numbers for its Distributed Energy and Power unit as well as negative weather impacts.

WebFG News reports that the broker, however, had hailed what it saw as ‘encouraging progress’ at Centrica’s Connected Home arm, where cumulative Hub customers reaching one million, together with a 29-percent improvement in revenues per user.

Analysts on British Gas owner

Deutsche Bank meanwhile reiterated its ‘sell’ stance on Centrica today, without specifying a price target on the shares. According to MarketBeat, the British Gas owner currently has a consensus ‘hold’ rating and an average price target of 163.18p.

As of 15:00 BST, Wednesday, 01 August, Centrica PLC share price is 144.65p.

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