Centrica PLC

CNA: XLON (GBR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	GBX 659.00	Dzmz	Kdjxtkq

Centrica: Guiding for 2024 EPS in Line With Expectations; Shares Undervalued

Tancrede Fulop

Jun 5, 2024

We confirm our GBX 180 fair value estimate after no-moat Centrica stated that it expects 2024 adjusted EPS to be in line with company-compiled consensus. This does not seem to please investors with shares down by 5% at the time of writing. The flagship measure of the Labour Party's manifesto regarding energy is the creation of a state-owned energy company, which will co-invest with existing companies to accelerate the rollout of renewables capacity and scale up small-scale energy projects. This does not challenge the sharp improvement of the UK retail energy landscape since 2021, which is beneficial for Centrica. Shares appear materially undervalued with a 2024 P/E of 7.4.

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