Berenberg lowers target price on Energean
By Iain Gilbert
Date: Monday 27 Jan 2025
(Sharecast News) - Analysts at Berenberg lowered their target price on exploration and production firm Energean from 1,045.0p to 940.0p on Monday following the group's recent FY trading update.
Berenberg said Energean retains "a strong long-term cash-flow profile" but stated that in the short term, it only forecasts a low-single-digit FCFE yield, before disposal proceeds, as the company invests in growing its asset base in Israel.
The German bank also lowered its dividend assumption to $1.40 per share, a roughly 11% yield, from FY25 to enable leverage to return to the Energean's target range over the medium term.
Energean also guided to production of 120,000-130,000 barrels of oil per day in 2025, 11% below Berenberg's previous forecast, after accounting for some shutdowns to complete development work.
"The reduced production outlook means our revenue forecasts fall 13%. Our EBITDA forecast is 15% lower, after factoring in cash opex guidance of $410m-$440m, and our EPS forecast is now 22% lower," said Berenberg, which has a 'hold' rating on the stock.
"We also incorporate the development capex guidance of $400m-$430m and net-debt guidance of $2.7bn-$2.9bn, which is higher than our previous forecast of just under $2.7bn, though we note potential to come in under this depending on the timing of the repayment of the 2026 notes and the monetisation of the Carlyle vendor loan note."
Reporting by Iain Gilbert at Sharecast.com
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