Berenberg lowers target price on Energean
Energean
985.00p
17:00 14/11/24
Analysts at Berenberg raised their target price on exploration and production outfit Energean from 1,540.0p to 1,750.0p on Friday, stating the group was delivering on both production and dividends.
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Berenberg said Energean's first-half results highlighted operational and financial performance below consensus expectations but, importantly, also confirmed first gas from its Karish development in Israel was imminent.
As a result, Energean raised medium-term guidance by 25%, and confirmed its maiden dividend payment a quarter ahead of schedule.
"Energean is likely to increase the minimum $1.0bn cumulative dividend by the 2025 target, in our view, supported by FCF of $1.75bn – even assuming full repayment of the 2024 bond," said Berenberg.
The German bank stated that Energean remained "differentiated from the sector" by its contracted pricing, long-term visibility and covered dividend, and also said offered net asset value upside through near-term drilling activity.
"On our updated forecasts, the shares are trading on FY 2023 EV/EBITDA of 3.3x; EV/DACF of 3.8x; an FCF yield of 21% and a 7% dividend yield," concluded Berenberg, which also retained its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com