First Berlin – SFC Energy AG Research Update (23/03/2020)

First Berlin Equity Research has published a research update on SFC Energy AG (ISIN: DE0007568578). Analyst Dr. Karsten von Blumenthal upgraded the stock to ADD but decreased the price target from EUR 11.40 to EUR 9.40.

SFC Energy has withdrawn 2020 guidance due to the covid-19 pandemic and the significant fall in the oil price. Management expects demand in the Industry and Oil & Gas segments to slow considerably in Q2 and Q3. In the Defence & Security segment, SFC expects a significant delay in demand in the first half of the year. As we do not know exactly how long the covid-19 pandemic will last, and how severe the global recession will be, it is difficult to estimate the likely impact on SFC. We lower our forecasts for 2020E and the following years. An updated DCF model yields a new price target of €9.40 (previously: €11.40). Following the recent share price decline, we upgrade the stock from Reduce to Add.