First Berlin Equity Research has published a research update on 2G Energy AG (ISIN: DE000A0HL8N9). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 34.00 price target.

2G Energy’s EBIT margin increased by 0.6 percentage points to 7.6% in 2023. EBIT thus rose 26% y/y to €27.6m. The main reason for the deviation from our forecast (FBe: €29.1m) was a one-off write-down of around €1m. 2G has raised the lower end of sales guidance for 2024 by €10m from €350m to €360m. The new guidance envisages sales of between €360m and €390m. We think this is conservative and confirm our sales forecast of €398m. EBIT margin guidance for the current year remains unchanged at 8.5% – 10.0%. We are slightly more cautious for the EBIT margin in the current year due to rising operating costs and now forecast a widening of the margin to 8.8% (previously: 9.3%). 2G is thus continuing on its growth path with rising EBIT margins. We see the share price decline of recent months as an entry opportunity and confirm our Buy recommendation. An updated DCF model still yields a €34 price target, which corresponds to upside potential of ca. 50%.