Centrica PLC (LSE:CNA) was the flavour of the day with a raft of 'buy' notes this morning even after being hit with a windfall tax in the Autumn Statement.
Citi upped its price target to 110p and said the increased clarity following the chancellor’s statement underpins why the British Gas owner is its preferred UK utility.
“A combination of strong profits and cash generation in the near term from commodity exposed businesses, EM&T teach-in potentially providing further visibility that demonstrates the sustainability of profits and the ongoing share buyback, should all help to re-rate the Centrica shares, in our view.”
“Furthermore, the potential return to a competitive retail market beyond 2024 (rather than regulated margins) in a more stringent operating environment with less competitors could provide retail margin upside.”
Citi’s targets for earnings over the years 2022-24 go up by 25-50%, while the investment view remains 'buy'.
JP Morgan, meanwhile, added that the Autumn Statement news materially “derisked the outlook for UK Power Generation”, including Centrica.
Shares rose 2.4% today to 93.9p.