LONDON (ShareCast) - Kedco, the developer of small/mid-sized renewable energy projects, has received a positive endorsement today from analysts at WH Ireland.
While highlighting that a full 77% of the company’s existing portfolio comes from operational or near-complete projects, the broker stresses that the company is considerably undervalued.
WH Ireland analysts base their estimates – above all - on the fact that the firm’s development model should allow it to generate returns of between 3x – 7.5x on individual projects that typically take 3 years to execute. By its calculations that works out as an internal rate of return (IRR) of 60 – 100%.
As well, Kedco has an experienced development team who will continue to source attractive projects they say.
At present, and in a break-up scenario, the existing portfolio would be worth 2p per share, double the current market value.
Lastly, in three years’ time they believe the 140MW portfolio (then virtually complete) would be worth £90m to Kedco, equivalent to 6.3p per share. The incremental 175MW of projects could add a further 2.3p per share at that stage, they say.
For all of the above reasons WH Ireland has issued a ‘speculative buy’ recommendation on the outfit with a 2p per share target price.
AB
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