This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Defensive non-cyclical sector, a potential port in a storm for investors when risk appetite sours. Able to pass on energy cost rises. First half results showed strong jump in profits, on track for FY targets. Highly competitive 8.3% dividend yield (5th highest on UK Index ) makes the shares attractive to income seekers.
Risks to Centrica shares include any extreme government intervention to regulate prices, a jump in energy costs (coal, oil, gas) that the company is unable to pass on, Brexit disrupting European power flow sharing agreements (UK blackouts?) and negative broker comments/downgrades.
Brokers/analysts are bullish on the shares with only 16% suggesting Sell. This is supported by 73% of broker price targets suggesting upside from current levels, to a consensus target of 157p which is just below our target of revisiting July highs.
Next Event: Ex-dividend (3.6p/2.4%), 11 Oct; Trading Update, 22 Nov
Latest Broker 12-Month Consensus: 27% Buy, 67% Hold, 7% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 1.4 | -4.5 | 0.8 | 2.0 | -25.4 | -37.6 | -40.0 | -54.4 | -62.2 |
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Prepared by Michael van Dulken, Head of Research