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(Sharecast News) - Analysts at Jefferies upgraded energy services and solutions company Centrica's shares to 'buy' on Tuesday, stating the group now appeared to be "taking back control".
Jefferies said the disposal of Centrica's US business for £2.85bn was, in its view, "transformational" and showed management was taking back control after "an uncontrollable period".
The analysts also pointed out that the first-half Covid-19 hit to the group of £60m was lower than it expected - resulting in a 25% cut to the pandemic's overall estimated impact and leaving Jefferies confident in Centrica's ability to weather the second-half storm.
With this and a recovery in commodity prices, Jefferies increased its 2020-21 earnings per share forecast for the group by 25% despite deal dilution.
Jefferies also highlighted that Centrica was up 20% since the disposal announcement but still remained at a 45% discount to the sector as a whole.
"The benefits of the US deal are by far the largest factor adding +22p, whilst there are also moving parts around the current cost-savings plan," said the analysts.
14 Mar 2023 16:55
LONDON MARKET CLOSE: Stocks green as financial instability fears ebb
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