First Berlin – PNE WIND AG Research Update (23/11/2017)

First Berlin Equity Research has published a research update on PNE WIND AG (ISIN: DE000A0JBPG2). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and increased the price target from EUR 3.70 to EUR 3.80.

At its 15 November Capital Markets Day, PNE Wind announced its strategy to transform the company from a wind project developer into a clean energy solution provider active in wind and photovoltaics (PV) project development, storage, power-to-gas, energy supply management, and energy services. Furthermore, PNE wants to expand into new markets such as Central America, the Middle and Far East, and Africa, which look set to show strong growth in coming years. Given more competitive and often stagnating European markets, we see regional expansion as a future growth driver for PNE. The transformation of energy markets towards clean and distributed energy production is a global trend, an ecological necessity, and current or future an economic advantage. This transformation creates new business models and drives new markets such as storage and sector coupling. We believe that PNE's new strategy opens up new growth areas for the company and derisks the business model, which in the past was almost completely dependent on wind project developmenta volatile business prone to regulatory changes. PNE plans to increase average annual EBIT by 30-50%, and reduce earnings volatility in the medium term. We have increased our medium-term EBIT forecasts and the price target to €3.80 (previously: €3.70). We reiterate our Buy rating.