Broker snap: Nomura lauds Centrica

18th Dec 2009 12:55

Japanese broking house Nomura Securities has published a report on the outlook in 2010 for the European Utilities sector in which it identifies energy provider Centrica as one of its three top buys of the year.Centrica 'has become master of its own destiny through a combination of upstream acquisitions and a more competitive supply business,' Nomura analyst John Musk asserts, with a 'better balance between upstream and downstream assets.'Nomura now estimates 45% of the company's enterprise value is in upstream assets, 'which de-risks the P&L [profit & loss].''Margins in the supply are expected to remain robust around the 7% level and growth will come from additional customers and product bundling,' the broker believes.Nomura has a 'buy' recommendation and 340p price target on the stock.