Centrica PLC (LSE:CNA) shares have faced a 4% fall since the energy company reported full-year earnings would be at the top end of forecasts, but investors shouldn’t worry, Citi Group says.
“Centrica's tepid share price performance in recent days […] is a reflection of positioning rather than concerns on fundamentals,” Citi analysts said in a note.
Centrica should unveil “sustainable” pre-tax earnings in next month’s half-year earnings around the £1bn mark, the bank said, implying earnings per share of 12p to 13p.
“We expect this medium-term guidance to provide earnings and cashflow visibility and […] drive a continued re-rating of the shares,” analysts continued.
Centrica announced on Tuesday that “significantly” higher profit from retail operations than in previous years would likely drive top-end earnings per share in 2023.
Citi commented that guidance of between 16.5p to 24.7p per-share earnings was “conservative” though, prompting a reiterated ‘buy’ rating for the British Gas owner.
Centrica shares rose 1.6% to 117.5p.