First Berlin Equity Research has published a research update on ABO Energy KGaA (ISIN: DE0005760029). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and decreased the price target from EUR 97.00 to EUR 31.00.

Abstract
ABO Energy expects a net loss of ca. €-93m for the current year. Previously, the company had forecast a net profit in the range of €29m to €39m. Consolidated total output will not increase by 5% to 30% as announced (base 2024: €445m), but will instead be around €250m. The reasons for the profit warning are the postponement of major wind projects to 2026 and significant special write-downs on projects that had to be revalued in view of falling feed-in tariffs. Management has launched a comprehensive efficiency and transformation programme to adapt the company’s processes and structures as well as its international project portfolio to the changed market environment. During an online conference call, management put the targeted savings at €50m to €60m. The company plans to achieve a positive net result in 2026E. The sharp decline in the share and bond prices shows that some market participants fear insolvency. Although this cannot be completely ruled out in such crisis situations, the valuation of the project pipeline by the consultancy EY-Parthenon has shown that it remains valuable. We therefore assume that the banks (August: syndicated loan of €240m) will grant a waiver in the event of a breach of the covenants. At the end H1/25, ABO Energy had €40m in cash at its disposal. The sale of 4.4 GW of the Finland pipeline agreed with Fortum Oyj was completed at the end of November, resulting in a cash inflow of ca. €40m easing the liquidity situation. Provided the banks continue to support ABO Energy, we see a good chance that the company will achieve a turnaround. We have significantly lowered our forecasts and raised our WACC assumption due to the increased risk. An updated DCF model yields a new price target of €31 (previously: €97). The share remains a Buy for speculative investors (upsinde: 122%).