Centrica share price: what’s the latest ahead of its full-year results?

Centrica will release its full-year (FY) results next week, with investors hoping it will meet its 2019 earnings targets.

The energy and services company expects its adjusted earnings to be weighted towards the second half (H2) of the year, with operating cash flow forecast to come in at the lower end of the £1.8 billion - £2 billion range. Year-end net debt is expected to be within the targeted £3 billion - £3.5 billion range.

In November, Centrica increased its efficiency savings forecast by £50 million to £300 million, though its capital investment guidance was cut by £100 million to £800 million

However, its FY performance remains subject to the usual variables of weather patterns, commodity prices and operational and commercial performance, the company said.

Centrica is trading at £84p as of 16:15 (GMT) on Wednesday.

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Barclays Capital upgrades price target for Centrica

Analysts from Barclays Capital reiterated their ‘underweight’ rating for Centrica in February and issued a price target of 84p, implying the stock is valued correctly at present, but investors should consider reducing their holdings in the company.

However, analysts from Jefferies and UBS took a bolder view of Centrica’s share price trajectory in January, with the pair both issuing price targets of 110p for the stock, implying potential upside of 30.9%.

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Centrica faces stiff competition from smaller peers

Centrica continues to see margins come under pressure from a highly competitive energy market, with the sector filled with smaller, nimbler rivals.

To make matters worse for the big six supplier regulators have applied a cap on tariffs due to concerns that British consumers were being subjugated to rip-off charges for their gas and electricity.

‘The rate of UK energy supply net losses was lower than in the first half of the year and significantly lower than in 2018, despite continued high levels of price competition and market switching,’ Centrica said in its November trading update.