LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg lowered their target price on hydrocarbon exploration and production company Energean from 1,520.0p to 1,430.0p on Monday after revising its model on the group's Israeli operations and incorporating its recent Moroccan acquisition.
Berenberg stated that overall, the long-term cash flow and dividend story at Energean remained intact and that it believes the stock's current valuation to be "attractive". However, Berenberg noted that this was dependent on one's "level of comfort" with the current state of affairs in Israel.

"So far, there has been no operational issue or cause for concern in relation to Energean's infrastructure, although any escalation is likely to again increase the risk premium," said Berenberg, which reiterated its 'buy' rating on the stock.

"Assuming this remains the case, our investment thesis on the company's long-term cash flow visibility, supported by the contracted pricing in Israel, remains unchanged. On our updated estimates, the company will generate an average FCF yield in 2024-2030 of 42%, which will more than support a dividend yield of 17% assuming the payout ramps up to $100.0m per quarter in the short term. The cash flow will also enable rapid deleveraging with net debt/EBITDA below 1.5x by the end of 2025."

The German bank said its price target was set to provide roughly 40% upside from the current price.



Reporting by Iain Gilbert at Sharecast.com

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE