British Gas owner Centrica PLC chalked up a 3% gain on Friday as Citi analysts commended the energy firm’s full-year results.
The American investment bank reiterated a ‘buy’ rating, flagging “stellar” results that saw shareholder returns hiked and showed balance sheet efficiency, earnings visibility and stability, alongside clarity on growth.
Indeed, Centrica on Thursday unveiled a new £500 million buyback and lifted its full-year dividend from 4.0p to 4.5p a share on a 4.2% increase in net cash to £2.9 billion.
Though profit tumbled, Centrica noted this reflected “normalising” conditions after it had benefited from heightened energy prices in recent years.
Citi noted shareholders were set to be rewarded with the best returns in the sector as they awaited news of potential nuclear and gas storage investment, as well as any acquisitions.
“In addition, already identified investments (gas peakers and meter assets) opportunities should help to mitigate much of the void left by a normalisation of commodity prices.”
“Further investment opportunities should add to earnings.”
“Valuation upside” was highlighted as Citi also raised to share price target to 187p.
Shares were trading hands at 147.80p early on Friday.