LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity raised their target price on renewable energy company Good Energy from 450.0p to 475.0p on Wednesday, citing the firm's mostly profitable 2021 performance and its stake in Zap-Map.
Canaccord noted that the Good Energy of today was two business lines - a UK-wide deep green supply operation, more commercial than retail, with a more than a ten-year track record of profitability, exempt from the price cap, and trading, mostly, profitably through 2021.

However, the analysts also pointed out that Good Energy also had a 50% stake in Zap-Map, an electronic vehicle charging app, which has grown in line with UK EV rollout, roughly doubling every 12 months, and has plans to expand to new geographies.

The Canadian bank stated that following the sale of its generation portfolio to Bluefield Solar Income Fund, providing it with equity proceeds of £16.0-24.0m, Good Energy should close the year with a roughly £3.0m net cash position.

In addition to this, Canaccord said Good's supply business was experiencing "unusually high working capital" of at least £15.0m above normal, which it expects to reverse going into 2023 as the UK energy market gets closer to "a new equilibrium".

"With the group likely to generate circa £8.0m in EBITDA from '23E onwards, and significant potential upside from Zap-Map, we find it difficult to justify the current share price," said the analysts.

"We remain BUYers with a new price target of 475.0p (was 450.0p), of which circa 135.0p is cash, at which the stock would trade at just 10x/7x/5x 22/23/24E EV/EBITDA."

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