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Centrica weighed by Morgan Stanley downgrade following British Gas owner’s recent trading update

The US investment bank cut its rating for the energy distributor to ‘underweight’ from ‘equal-weight’ and reduced its target price for the stock to 115p from 160p
Gas cooker
In early afternoon trading, Centrica shares were 4.6% lower at 141.65p

Centrica PLC (LON:CNA) was the top FTSE 100 faller on Wednesday, weighed by a downgrade in rating by Morgan Stanley following the British Gas owner’s recent trading update.

The US investment bank cut its rating for the energy distributor to ‘underweight’  from ‘equal-weight’ and reduced its target price for the stock to 115p from 160p.

READ: Centrica shares edge higher as British Gas-owner on track to meet full-year targets

In early afternoon trading, Centrica shares were 4.6% lower at 141.65p.

Morgan Stanley’s analysts noted that Centrica continues to lose customers across its UK and US businesses, and it has missed targets for new business growth.

They expect UK retail competition to remain intense for Centrica post a tariff cap, which will mean lower customer numbers, and more pressure on profitability.

The analysts also see greater levels of competition coming in the US retail business as peers consolidate and remove costs.

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