Centrica Still Undervalued, say Analysts

Despite a fall in customers and a cold winter, Morningstar equity analysts are maintaining their fair value estimate of 160p for Centrica's shares

Tancrede Fulop 14 May, 2018 | 2:44PM

British Gas Owner Centrica

After British Gas owner Centrica (CNA) released a trading update for the first four months of 2018, Morningstar equity analysts are reiterating the fair value estimate for the company to 160p, above the current share price of around 148p a share.

We will not change our earnings forecasts following this update. Our fair value estimate implies a 7.5% dividend yield, with the current yield above 8%. The premium to the sector average is justified by regulatory uncertainty in the United Kingdom, in our view, and Centrica's shares look slightly undervalued.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Centrica PLC33.92 GBX-8.60

About Author

Tancrede Fulop  is an Equity Analyst for Morningstar

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