Sharecast - "With one of the best balance sheets in the sector, delivering above sector average 8% yield via returns to shareholders (both dividends and buybacks), Centrica (LON:CNA) shares continue to look attractive in a sector relative context," the bank said.
"We update our earnings and valuation to reflect the secured growth in flexible generation assets, which we estimate to deliver an aggregated portfolio IRRs of circa 10% with the support of capacity market payments."
Citi said that with retail churn continuing to be low and Ofgem consulting to increase bad debt allowance, it continues to see a good balance of risk and reward from the retail division.
The bank said that value creation from new secured only investments, lower risk retail earnings and falling liabilities led it to up the price target.
At 1040 GMT, the shares were up 1.7% at 158.59p.