Jefferies downgrades Centrica, lifts Petrofac

Jefferies energy analyst team giveth and it taketh away on Monday, upgrading Petrofac and downgrading Centrica.

The broker feels Petrofac has become an "increasingly well-run business" providing "realistic expectations" within the tough oilfield service market.

Pointing to a net cash balance sheet "firmly in sight" and "realistic new awards" required for 2019, the analysts upgraded to 'buy'.

While Jefferies expects to see "good results" from Petrofac on 28 February, the broker trimmed its target price on the firm to 590p from 640p.

However, the same positives could not be seen over at British Gas owner Centrica, which Jefferies downgraded to 'hold' from 'buy'.

Jefferies sees material downside risk to Centrica's 2019-20 earnings, "borderline" credit metrics and "limited" market-to-market benefits of higher commodity prices in the medium-term.

"With this, we see a timely disposal of Centrica's 20% nuclear stake as critical to protect its balance sheet against another potential hit."

With a "weak" full year trading update from Centrica is expected in February, the target price was cut to 125p from its previous 170p standing.