Centrica’s Balanced Outlook: Strong Upstream Performance Offset by Tax Expenses and Market Uncertainty

Morgan Stanley analyst Harrison Williams maintained a Hold rating on Centrica today and set a price target of p160.00.

Harrison Williams has given his Hold rating due to a combination of factors that reflect both positive and challenging aspects of Centrica’s recent performance. The company’s EBIT for the first half of 2025 exceeded expectations by 8%, primarily due to stronger-than-anticipated results in the Upstream segment and Spirit Energy. However, this positive outcome was counterbalanced by higher tax expenses, which offset the gains in operating profit.
Despite the strong performance in certain areas, Centrica’s overall financial outlook remains cautious. The company’s net cash position was slightly below expectations, and while there was progress in the share buyback program, market conditions in the first half were weaker than anticipated. Additionally, the guidance for Centrica Energy’s EBIT is contingent on market conditions improving in the second half of the year. These mixed signals contribute to the Hold rating, as they suggest a balanced risk-reward scenario for investors at this time.

According to TipRanks, Williams is a 3-star analyst with an average return of 13.6% and an 82.35% success rate. Williams covers the Utilities sector, focusing on stocks such as Fortum Corporation, Centrica, and Elia System Operator SA/NV.

In another report released yesterday, TR | OpenAI – 4o also downgraded the stock to a Hold with a p179.00 price target.