First Berlin Equity Research has published a research update on 2G Energy AG (ISIN: DE000A0HL8N9). Analyst Dr. Karsten von Blumenthal downgraded the stock to ADD but increased the price target from EUR 32.00 to EUR 33.00.

Abstract
In the first quarter, 2G Energy increased sales by 41% y/y to €68.5m. EBIT improved from €-0.8m to €-0.2m in the typically seasonally weaker first quarter. Despite the record Q1 sales, 2G was able to maintain the order backlog at the peak level of the previous year’s quarter (€190m). We expect this positive development to continue in subsequent quarters and raise our forecasts. We now expect 2G to achieve sales above guidance (€310m – €350m). We increase our EBIT forecast only slightly and stick to our EBIT margin forecast of 8.0% (EBIT margin guidance: 6.5% – 8.5%), as the pass-through of higher component prices to customers takes time and thus weighs on the margin. An updated DCF model yields a slightly higher price target of €33 (previously: €32). After the recent price increase, we downgrade our rating from Buy to Add as the share price appreciation potential is now below 25%.