Centrica: Credit Suisse cuts forecasts

(CercleFinance.com) - British integrated energy company Centrica yesterday appointed a new Chief Financial Officer, halved the size of the Board of Directors and moved the restructuring of 2020E and 2021E mainly to the 2nd half of 2020E.


"We tweak down our 2020E and 2021E Adjusted EPS by c11% and c3% respectively, on the back of our assumed lower consumption in Business supply," Credit Suisse said.

"We already include c£250m additional bad debt in 2020E and £125m in 2021E," the broker adds.

"Cost out plan to keep Centrica competitive: We assume that the c£500m of cost savings (difference between the 2019A and Q1 2021 exit rates) will offset the impact of a recession (hence not increase EBIT)".

Credit Suisse confirms its Outperform (buy) rating on the share with a target price of 70 pence. In late morning trading on Friday the share is currently up over 4% at nearly 42 pence.


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