- Centrica
- 31 May 2024 10:37:05
Source: Sharecast
"A more positive outlook on numbers drives an increase in our valuation and an upgrade to outperform, whilst we think that upcoming reporting could provide a positive catalyst to shareholder returns," the bank said.
RBC noted that the British Gas owner has traded broadly in line with gas prices year to date, with a positive uptick over the past month partially offset as the UK announced an election.
"We approach a number of touchpoints for CNA in terms of reporting where we think the downside risk is relatively limited, yet there is potential to the upside given the strong position on the balance sheet, recovering commodities and a more favourable outlook in retail YTD than we previously forecast," it said.
"We expect CNA may give a market update alongside its AGM next week and see the interim results in July as a significant touchpoint for the balance sheet and shareholder returns."
The bank also said it’s more positive on its UK retail outlook with lower competition providing a positive tailwind at the start of the year, although partially offset by milder weather.
"Elsewhere, a recovery in commodity environment is helpful for sentiment, whilst recent volatility should benefit Centrica Energy," it said.
"Bills are likely to be high on the political agenda; however, Labour policy appears to favour a more structural approach to lowering bills through the build out of additional renewables, whilst the party maintains a pro nuclear stance."
At 1035 BST, the shares were up 3.5% at 144.08p.