In February, Centrica warned that its 2019 financial performance would be hit by the government’s energy bill price cap that comes into force in April.
"For some time we have argued that the introduction of price regulation in the UK would adversely impact competition leading to compressed market pricing and therefore lower churn," JP Morgan said.
"All else equal while earnings would be hit by the cap, lower earnings volatility and stable customer numbers were expected to provide cost of capital relief and multiple expansion in the operating periods ahead."
JP Morgan said a temporary surge in commodity prices in the third quarter has created yet another perfect storm for Centrica and will likely increase customer churn.
"Add mild first quarter weather, nuclear outages and softening upstream revenue to the mix and we now see 2019 and 2020 earnings per share below consensus," it said.
"Combined with an impending dividend cut, this is unfortunately too much for us to endure, despite the weakness in the share price."
JP Morgan cut its rating on the stock to ‘neutral’ from ‘overweight’ and lowered its target price to 125p from 150p.
Shares in Centrica were down 0.3% to 108.9p in late morning trading.