First Berlin Equity Research has published a research update on Deutsche Rohstoff AG (ISIN: DE000A0XYG76). Analyst Simon Scholes upgraded the stock to BUY and maintained his EUR 51.00 price target.

Abstract
H1/24 production jumped ca. 41% to ca. 14,800 boepd (H1/23: 10,533 boepd). The rise in output was due to new wells coming on stream at better than expected production rates. We estimate that DRAG’s subsidiaries brought 21 net new 2-mile-lateral wells on line between May 2023 and end-June 2024. DRAG has maintained its FY/24 guidance of 14,700-15,700 boepd, the midpoint of which equates to a 19.1% increase on last year’s figure of 12,762 boepd. 2024 sales and EBITDA guidance of €210m-€230m and €160m-€180m respectively is also unchanged. On the basis of current commodity strips, which are little changed on our most recent update of 8 May, we continue to believe that DRAG is capable of sustaining revenue at around €200m in the mid-term, while reducing net gearing. Our price target of €51 is unchanged, but we have raised the recommendation from Add to Buy because the upside to our price target is now over 25%. Comprehensive H1/24 results are scheduled for mid-August.