Analysts at Canaccord Genuity lowered their target price on bioscience energy company Eqtec from 2.8p to 1.8p on Tuesday, stating it was taking a “much more cautious overall view” for the firm in 2022 and beyond.
Canaccord Genuity said Eqtec had “a successful close” to 2021, with a number of further projects firming up, most notably a French contaminated plastics project and increasing interest in hydrogen offtake from several projects.
Eqtec’s smaller projects, and in particular its multiple market development centres, were also said to be “progressing well”, as were the company’s relationships with major delivery partners like Wood, and Canaccord sees this delivering “strong growth” in 2022 and thereafter.
However, the Canadian bank said it was taking the much more cautious view in order to reflect the impact of Covid-19 on project progression, specifically the movement to the right on Eqtec’s large refuse-derived fuel projects in the UK.
“We now see only one of these large projects reaching financial close this year, and this has a material impact on overall forecasts,” said Canaccord, which retained its ‘speculative buy’ rating on the stock.
Morgan Stanley upgraded its stance on shares of Imperial Brands on Tuesday to ‘equalweight’ from ‘underweight’ as it took a look at tobacco stocks.
The bank acknowledged that the stock’s valuation was undemanding and risks skewed to the upside in the event the company launches a buyback programme, particularly in light of moderating leverage levels.
“However, IMB’s narrower next generation products focus is likely to keep growth in operating profit and cash flow generation below that of EU peers, with a higher risk on forecasts, making a sustained multiple re-rating less likely versus peers, in our view,” it said.
MS forecasts 1% revenue, 2% operating profit and 2% earnings compound annual growth rate over 2022-2025.
Analysts at Berenberg lowered their target price on exploration and production firm Kistos from 530.0p to 455.0p on Tuesday but said a recent accretive acquisition would provide the group with “material cash flow”.
Kistos announced the acquisition of an interest in the Greater Laggan Area from TotalEnergies on Monday, a move Berenberg sees adding roughly 85% to pro-forma 2022 production and about 33% to the company’s reserve base.
However, the German bank also said results of Kistos’ Q11-B appraisal were also announced and came in “significantly below expectations”, with the main reservoir water-wet, although it acknowledged there was “some encouragement” in two shallower horizons.
“The net effect of our changes is a 15% reduction in risked NAV to €494.0m, or 497.0p per share (from 583.0p per share). We continue to exclude the M10/M11 assets from our price target, which is now set at 455.0p (from 530.0p) – offering circa 20% upside from the current share price – and we retain our ‘buy’ rating,” said the analysts.
