Berenberg lowers target price on Kistos

Berenberg updated its model on Kistos and incorporated a view of the tax proposals from the EU and the Dutch government, applying a "conservative base case" to its numbers, which assumes the Dutch government levies its proposed 65% sales royalty in the 2023-24 trading year and that the EU tax of 33% applies to the firm's 2022 profits, the net result brings it to its new price target - which still implies roughly 63% upside from the stock's current price.

"We view this as a floor to Kistos's valuation, with potential upside driven by: 1) the final outcome of the proposed Dutch levy, which may be below the current 65%; and 2) our gas price deck, which remains significantly below the forward curve," said the German bank, which stood by its 'buy' rating on the stock.

"The company remains cheap, in our view, and on our updated forecasts is trading on respective FY23/FY24 EV/EBITDA of 0.8x/0.4x and an FCF yield of (42%)/48%."

Reporting by Iain Gilbert at Sharecast.com