First Berlin Equity Research has published a research update on ABO Wind AG (ISIN: DE0005760029). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 118.00 price target.
The past year was by far the most successful year in ABO Wind’s corporate history. Twice the company increased net profit guidance and finally achieved a net profit of €24.6m. Thus, earnings were at the upper end of the latest guidance of €20m – €25m. The company has thus managed to top the €20m mark two years ahead of the original target. For 2023, ABO Wind also expects a profit in a similar amount (€22 – €26m). The project pipeline has increased by 1 GW to 21 GW. In addition, there is the hydrogen-based project pipeline of 15 GW. These very large pipelines promise further profitable growth in the coming years. Following strong operating earnings in 2022, which were 14% above our estimate, we have raised our EBIT forecasts for 2023 and subsequent years. However, due to higher interest rates, we also assume higher interest expenses. We therefore confirm our net profit forecast of €24m for 2023. We assume that the significantly improved regulatory environment in Germany (in particular, shorter approval periods, area expansion, higher maximum prices in the tenders) and Europe (EU Emergency Ordinance) will take full effect from 2024 and provide additional impetus to ABO Wind’s business. The company was also highly successful in the German tender for onshore wind power in February, winning seven projects with a total capacity of 87 MW. An updated DCF model yields an unchanged €118 price target. After the recent share price decline, we see significant upside potential (ca. 60%). Still a clear Buy.