Centrica PLC (LSE:CNA) is in the middle of rewiring itself as an energy business, and JP Morgan thinks the market is not giving it enough credit for what that transformation will deliver.
The US investment bank has reiterated its 'overweight' rating on the British Gas owner with a street-high price target of 224p, implying 19% upside from current levels.
The core argument is straightforward: a 14% earnings per share compound annual growth rate, combined with a shift from zero regulated or contracted infrastructure earnings in 2025 to around 25% of group EBITDA by 2030, should command a premium to where the shares trade today.
The transformation programme carries a price tag of up to £600 million and JPM is candid about execution risk.
It is also running below Bloomberg consensus for 2026 and 2027, partly because of lower trading earnings and one-off costs associated with the restructuring.
But further out, the bank's numbers diverge sharply in Centrica's favour. JPM is around 7% above consensus for 2028 and 2029, and 15% above for 2030, reflecting both the maturing benefits of the programme and its expectation that nuclear life extensions will be confirmed.
That nuclear angle is one of several catalysts JP Morgan flags for 2026 specifically. Clarity on a remuneration framework for gas storage, confirmation of life extensions at Centrica's existing nuclear assets, and potential positive newsflow on Advanced Modular Reactors could all move the dial this year.
Perhaps the most striking element of the JPM thesis is the balance sheet. Even after absorbing the transformation investment, the bank expects Centrica to remain net cash in 2030, with more than £2 billion of headroom available for further acquisitions or buybacks.
In late morning trading, the shares were up 1.8% at 191.71p.