Centrica’s share price falls 9%! What the heck’s going on?

Centrica‘s (LSE:CNA) share price has taken a painful dive. At 177.5 per share, the power big was final 7% decrease on Thursday (19 February), making it the largest loser throughout each the FTSE 100 and FTSE 250 indices. It was down 9% at one level.

Buyers have had a little bit of a shock with their morning espresso, the Footsie agency asserting a full-year income droop, issuing disappointing forecasts for 2026, and placing the block on additional share buybacks.

The query is, are Centrica shares a horny dip purchase to think about?

What’s going on?

In a fairly underwhelming full-year replace, Centrica introduced a 48% crash in adjusted working income for 2025. At £814m, revenue dropped as hotter climate meant households consumed much less electrical energy and gasoline.

Earnings at British Fuel fell 39% to £163m, though buyer numbers rose 1% to 7.96m.

That wasn’t Centrica’s solely downside in what CEO Chris O’Shea described as a “difficult” 12 months. At its Centrica Power buying and selling arm, adjusted working revenue greater than halved to £150m. This was properly beneath the firm’s medium-term revenue goal of £250m-£350m.

The unit was hit by weaker commodity costs and market volatility returning to regular ranges. Centrica Power purchases after which shops gasoline when costs are beneficial, then sells it on when values enhance.

Triple hassle

In addition to asserting these disappointing income, Centrica mentioned it’ll make no additional share buybacks after the £2bn programme that accomplished in January.

O’Shea mentioned that the determination “permits us to prioritise funding that creates lasting worth for shareholders“. Extra particularly, the firm is investing closely in belongings comparable to the Sizewell C nuclear plant and the Grain LNG terminal it bought in August.

To cap issues off, Centrica mentioned it expects adjusted earnings of simply £250m in 2026 from its buying and selling enterprise (which incorporates Centrica Power). This displays ongoing market weak spot and excessive web curiosity prices.

In higher information, web money fractionally beat forecasts at £1.5bn, although this was nonetheless down 48% 12 months on 12 months. Centrica additionally raised the full-year dividend to five.5p in 2025, up 22%.

Is Centrica a Purchase?

In the present day’s price plunge means Centrica’s price-to-earnings (P/E) ratio for 2026 is 13.5 occasions. That’s beneath the 10-year common of 15-16. However is that low sufficient to encourage me to purchase its shares?

Huge funding in areas like nuclear and renewables supplies the enterprise with huge progress alternatives wanting forward. The issue is the price can be enormous — whole capital expenditure greater than doubled final 12 months, to £1.2bn — and can stay elevated for the subsequent few years not less than, hitting earnings.

The implications on Centrica’s share price and dividends may subsequently be important, and notably if market situations are powerful. The FTSE 100 firm is likely to be price a glance from dip patrons. However I gained’t be shopping for it for my portfolio.