Investing.com -- RBC Capital Markets has reaffirmed its bullish stance on Centrica (LON:CNA) following the company’s acquisition of a 50% stake in the Isle of Grain terminal, keeping its price target steady at 200p and reiterating its “outperform” rating.
RBC analysts said the deal strengthens Centrica’s visibility toward its post-2028 earnings target.
The Isle of Grain stake is expected to deliver an unlevered internal rate of return of about 9% and an equity IRR of roughly 14%, with an annual EBITDA contribution of £100 million.
That marks a meaningful step toward Centrica’s £1.6 billion EBITDA ambition beyond 2028.
The brokerage flagged that Centrica’s balance sheet gives the company scope to pursue further investments or shareholder returns, supported by a strong net cash position.
Of a £4 billion investment plan, just over £1 billion of capital expenditure remains uncommitted after factoring in both the Isle of Grain and Sizewell C projects.
For 2025, RBC forecasts capex at about £750 million, placing it at the top end of the £600 million to £800 million range Centrica had targeted.
RBC noted that the EBITDA uplift from the Isle of Grain deal adds around 7% to forecasts, while adjusted earnings per share increase by 2% after accounting for fair value amortisation and project finance costs.
Analysts also pointed to ongoing discussions with the UK government regarding the Rough gas storage facility, which supplies around half of the country’s storage capacity.
They expect some form of agreement to ensure the asset remains operational as part of the government’s upcoming review on gas system resilience.
