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A healthy pullback today before the next leg up. I think £1.90 is a conservative target for Centrica given it's prospects.

September 19, 2023.

Centrica announces new £4 billion ‘green-focused’ investment strategy:

Centrica, the parent company of British Gas, has announced a new investment strategy which will see the company invest £600-800 million a year until 2028 in renewables.

Centrica hopes to invest “up to £4 billion over the next five years” in renewables, flexibility and customer decarbonisation measures like smart meters.

The company says it hopes to deliver “around £800 million of sustainable adjusted operating profit on average each year from our Retail and Optimisation activities”.

The company will invest in its own projects like the recently operational 18MW Codford Solar project, or joint projects with partners.

On security of supply and flexibility, Centrica says they: ”have experience in batteries and gas-peaking plants, and we already own a range of sites with valuable grid connections.” The company completed the construction of the 49MW Roosecote battery storage site in Cumbria in 2018.

Investment will also go towards “customer activities to cement our leading market positions and unique workforce. We will invest in our own Smart Meter Asset provision and we will consider further opportunities such as financing or leasing heat systems to households.”

Chris O’Shea, group chief executive at Centrica said: “The new green investment strategy we’ve announced will see us invest several billion pounds in the energy transition, creating thousands of new well-paid jobs. Our robust balance sheet has allowed us to invest heavily in the UK and Ireland’s energy security and will make sure that our customers have cleaner energy at the right price.”

Centrica recorded profits of almost £1 billion in the first half of 2023. Profits before tax and interest reached over £3.3 billion in 2022. Centrica remains the largest electricity and gas supplier in the UK, covering about 25% of households, though Octopus Energy has grown rapidly in recent years and currently sits just behind Centrica.

It's going to be a long, cold winter, with energy costs increasing. All, good for Centrica. £2 mar come sooner than you think.

The following is taken from today's Yahoo finance:https://uk.finance.yahoo.com/news/224-centrica-share-price-hit-050600698.html

Before the H1 earnings, JPMorgan forecast that the British Gas owner would likely hold 40% of its then market value in net cash by late 2024.

This would represent quite a significant cash in hand position, around £3bn. It’s also a huge turnaround from its net debt position of £3bn in 2020.

In the energy industry, a cash buffer is particularly important given the volatility involved in the energy systems industry.

Moreover, a strong cash position not only allows companies to pounce on opportunities but facilitates ongoing investments in this capex-intensive industry.

Even after surging 224%, the stock trades at approximately 4.3 times forward earnings. While energy and cyclical firms typically command lower valuations, this represents an attractively low one.

It’s worth highlighting also that the firm’s forecast cash position could mean further buybacks and enhancements to the dividend policy. As it stands, the dividend yield sits just shy of 2%, some way below the index average.

While potential risks persist that could dent the share price, the long-term outlook appears favourable, indicating the possibility of additional increases in the price as investor sentiment improves.

Not twins - just agree that the bottom is around 60p.

60p ish looks inevitable - I'll buy then.

I should add that many times, I've got it wrong and lost $$$$$$$

Two big questions when trading shares:

1) when to buy

2) when to sell

I'm holding Centrica for now.

The future is bright - the future is Centrica.

Bernstein updates the key themes influencing European utilities & renewables in H2 2023, as well as its stock pecking order in the sector.

Wind turbine and solar panel prices have normalised due to lower commodity prices and logistic costs, leading to a competitive position for renewables levelized costs of electricity (LCOEs), the broker says.

Power purchase agreement (PPA) prices are still going up/stabilising, supporting better returns for renewable developers, it adds.

However, offshore wind is seeing mixed developments, with developers asking for higher PPA prices, facing impairments or cancelling projects in the U.S. while agreeing to pay significant fees for seabeds elsewhere, it says.

As retail energy costs are reduced, there is lowered risk of bad debts, and a temporary margin boost, Bernstein says.

Following the rise in interest rates, the brokerage still sees an uptick in allowed returns for regulated networks.

The broker's updated pecking order of stock picks for rest of 2023 is SSE its top pick, RWE, Orsted, Centrica and Fortum, all overweight rated. The broker keeps "market-perform" on National Grid and E.ON.

01/09/2023 - Centrica Plc: AlphaValue/Baader Europe maintains its add recommendation with a target price increased from 188 GBp to 191 GBp

I'm holding for now. I see Centrica going £2+ given the great prospects and dividend hike next year.

Centrica: Raising Our Fair Value Estimate To GBX 180 on Recent Positive Developments; Shares Cheap.https://www.morningstar.com/stocks/centrica-raising-our-fair-value-estimate-gbx-180-recent-positive-developments-shares-cheap

Legal & General Group looks well-placed to expand its pension business, Panmure Gordon says, despite a downbeat market reaction to the pension, insurance and investment-management firm's first-half results. They showed operating profit beating consensus estimates but down slightly year-on-year, with strong trading in the company's pension risk-transfer business and L&G Capital partially offset by L&G Investment Management, where rising yields and net outflows negatively affected assets under management, Panmure says. "The balance sheet remains strongly capitalized, which positions the group well to write another record amount of PRT business, where we expect the market to expand further in 2023," Panmure analyst Abid Hussain writes, reiterating the brokerage's buy rating. Still, shares top the FTSE 100 fallers, down 3.7%. (philip.waller@wsj.com)

For me the forthcoming results will establish the boards commitment as stated in the previous results to maintain its progressive dividend policy. If so, and I have no reason to doubt it, I expect a positive re-rating of Lgen shares.

Berenberg on Thursday increased its price target on Centrica

CNA

to 1.40 pounds sterling from 1.10 pounds and maintained its hold rating.

Centrica RNS on 4 August 2023 are 18:25

Centrica plc announces that today it purchased (through Citigroup Global Markets Limited) 226,032 Centrica plc ordinary shares of 6 14/81 pence each at a price of 138.9643 pence per share. The purchased shares will be held as treasury shares. Such purchase was effected pursuant to the Company's buyback programme announced on 5 April 2023 and effected in accordance with the non-discretionary agreement entered into with Citigroup Global Markets Limited, as announced on 5 April 2023.

Since 5 April 2023, Centrica has purchased 169,875,524 ordinary shares at a cost (excluding dealing and associated costs) of £201,007,369.82.

As the UK moves towards energy independence, they'll be a massive role for Centrica. Imo the next few months will see more announcements from Centrica on this - I'm holding on this basis.

On 28 July 2023, Citigroup upped it's price target for centrica to £1.55 with more upside potential.

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