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Centrica Page 6
Centrica (CNA)
The parent company of British Gas has been in the headlines recently as a result of the proposed Tory energy price cap. On the announcement of the policy, major names in the Energy sector fell alongside Centrica, however found some footing in mid-May to halt the sell-off. The formation of a Conservative-led government after the snap general election election may see the party remove some of their potentially market-harmful policies. Should this be the case, can Centrica continue to rally from its 2017 lows?
Will shares return to May highs of 210p (+6.4%) or pull back towards May lows of 190p (-3.7%)?
- Find support having fallen to lowest price since Feb 2016, however so far unable to overcome resistance
- Despite over 60% of brokers expecting the price to rise, consensus target only 2% above current level
- Relative Strength Index (RSI) showing no bias, however Stochastics sharply approaching oversold
- Momentum turned negative
Broker Consensus: 15% Buy, 35% Hold, 50% Sell
Bullish: RBC Capital Markets, Sector Perform, Target 250p, +27% (9 May)
Average Target: 201.5p, +2.1% (8 Jun)
Bearish: Investec, Sell, Target 170p, -14% (5 May)
Pricing and consensus data sourced from Bloomberg on 8 June. Please contact us for a full, up to date rundown.
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Prepared by Michael van Dulken, Head of Research
