UBS reiterated its 'buy' rating on Centrica PLC (LSE:CNA) with a 12-month price target of 200p following full-year results, despite flagging no incremental positives in the release.
The shares closed at 196p on 18 February 2026, implying forecast price appreciation of 2.0% and a forecast total return of 4.8%, below UBS’s market return assumption of 8.6%.
Adjusted earnings per share of 11.2p were in line with UBS’s 11.3p estimate and the company-compiled consensus of 11.2p.
At the operating level, British Gas Services and Solutions outperformed, delivering £114 million of operating profit against UBS’s £85 million estimate.
Centrica Energy, the trading division, underperformed with £150 million of operating profit versus UBS’s £203 million forecast.
Net cash of £1.49 billion exceeded UBS’s £1.24 billion estimate and was broadly in line with consensus.
The group booked £0.5 billion of impairments on gas production and existing nuclear assets, which UBS described as partly technical and driven by commodity curves, discount rates and life assumptions.
UBS highlighted continued pressure in domestic receivables, with aged debt in retail rising from £1.95 billion to £2.48 billion despite flat bills year on year.
Provisions increased from £0.8 billion to £1.04 billion, and UBS argued that annual rises in working capital were unsustainable for the industry.
The bank did not expect a material flow back of receivables and noted that recovery through regulated price caps did not match cash outflows.
Guidance for 2026 was issued for the first time and appeared weak relative to UBS forecasts.
The centre of the EBITDA range for retail and optimisation was £900 million, versus UBS’s £977 million estimate.
Centrica flagged that 2026 EBITDA in Optimisation would be £100 million below the centre of the range, implying £200 million of earnings before interest and tax in Centrica Energy, compared with UBS’s £267 million forecast and the previous £250 million to £350 million range.
Net interest expense was guided to £100 million, ahead of UBS’s £57 million estimate.
On the positive side, Rough gas storage was expected to break even in 2026, compared with UBS’s prior forecast loss of £50 million.
UBS forecast 2026 adjusted earnings per share of 14.0p, below the Visible Alpha consensus of 14.6p.
The company paused its share buyback programme, which UBS saw as an additional negative for sentiment.
There was only a modest uplift to the 2028 EBITDA target, to £1.7 billion from £1.6 billion, compared with UBS’s £1,753 million estimate.
The 2030 EBITDA target of £2.0 billion included life extensions at advanced gas-cooled reactor nuclear assets, which UBS treated as an embedded assumption.
UBS’s valuation was based on a sum of the parts methodology, which values each business division separately and aggregates them to derive an equity value.
In early afternoon trading, the shares were down 6% at 184.95p.