Centrica PLC

CNA: XLON (GBR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	GBX 685.00	Pttk	Ldxqjdxb

Reopening Rough Storage Site Will Boost Centrica's Short-Term Earnings; Shares Grossly Undervalued

Tancrede Fulop

Oct 31, 2022

We maintain our fair value estimate of GBX 130 per share after no-moat Centrica announced it reopened its Rough gas storage facility on Oct. 28 after being granted a 10-year license. This should boost short-term profits. On the other hand, Centrica confirmed its willingness to ultimately convert Rough to store hydrogen, which could be value-accretive should the firm get a regulated remuneration scheme. Shares are materially undervalued.

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