Citi reiterates 'buy' on Centrica

It pointed to sustainable earnings, a credible strategy to deliver growth in the medium term and shareholder returns (dividends and share buyback).

"With clarity around its strategic priorities, investments and financial outlook, we believe even those more critical of Centrica's business model in the past will have to take a fresh look at the equity story," Citi said.

"We upgrade our earnings per share across forecast years by circa 20% and upgrade our 12-month price target to 155p.

"Even after these changes, we see upside risk to 2H estimates, more cash returns 12 months down the road and a higher level of sustainable profits than the mid-range provided by Centrica."

Citi said it was closing its short-term positive catalyst watch on the shares.