Berenberg upgrades Energean to 'buy'
By Iain Gilbert
Date: Tuesday 22 Apr 2025
(Sharecast News) - Analysts at Berenberg upgraded exploration and production outfit Energean from 'hold' to 'buy' on Tuesday, stating the group appeared to be "resilient" to current market volatility.
Berenberg said it had updated its model on Energean to reincorporate its Egyptian, Italian and Croatian assets that were part of the disposal process to Carlyle. It also reduce its 2025 price deck in line with the rest of its coverage.
Importantly, Berenberg noted that only 20% of Energean's production was exposed to spot pricing, insulating the company from short-term commodity price volatility.
In its view, adding back the disposal assets improved near-term cash flow and dividend capacity in the business, although it acknowledged that Energean's $200.0m special dividend will now probably not be paid.
The German bank stated the net effect of its modelling changes had led to an increased price target of 1,000.0p, up from 940.0p, and more scope for "sustainable growth in shareholder returns".
"Adding back the disposal assets increases our 2025 and 2026 production forecasts by 36% and 28% respectively. The higher revenue drives EBITDA forecasts which are up 57% and 36% versus our previous numbers, and our EPS forecasts are now 138% and 83% higher than previously," said Berenberg.
"On our updated forecasts, the shares are trading on 2025/26 EV/EBITDA of 3.6x/3.4x, EV/DACF of 4.1x/3.8x and FCFE yield of 16%/20% and a dividend yield of 12%/14%."
Reporting by Iain Gilbert at Sharecast.com
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