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(Sharecast News) - JPMorgan Cazenove trimmed its price target on British Gas owner Centrica on Friday to 170p from 185p but said it remains 'overweight' the shares on upside from capital allocation discipline.
The bank said: "We remain positive on Centrica despite last week's trading update which implied earnings downgrades for 2025.
"In our view, the combination of strong cash flow generation from existing businesses and the potential for value creation from development capex underpin a positive risk/reward.
"While we have reflected a more cautious outlook for trading & residential energy supply, we also now reflect value accretion from Centrica's Meter Asset Programme (MAP) and investment in new build gas plants in Ireland.
"Furthermore, we could see positive news in the coming weeks on investments into new nuclear, as well as an agreement with the government on the future of Rough gas storage."
JPM said it continues to believe that management will maintain capital allocation discipline, underpinning its view that risk/reward is skewed to the upside.
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