First Berlin Equity Research has published a research update on PNE AG (ISIN: DE000A0JBPG2). Analyst Dr. Karsten von Blumenthal upgraded the stock to BUY and maintained his EUR 26.00 price target.
Morgan Stanley Infrastructure/Photon Management are no longer pursuing talks with potentially interested parties regarding an acquisition of the entire stake in PNE AG held by Photon Management. In a voting rights announcement of 19 January, PNE stated that Morgan Stanley/Photon have increased their stake from 39.8% to 44.2%. We believe that potential investors were unwilling to pay the then prevailing market price (market cap: >€1.5bn). However, we argue that the high valuation is justified and see further upside potential as we believe that PNE will successfully execute its accelerated growth strategy ?Scale up 2.0?, which it first presented in November 2022. By 2027, the strategy's main targets are to (1) increase EBITDA to >€150m (2021: €33m), (2) expand the own green power plant portfolio from 319 MW (end 2022) to up to 1,500 MW/MWp (planned CapEx: €1.6bn), (3) expand the project pipeline to >20 GW/GWp (9M/22: 11.4 GW/GWp) and sell an average of ~600 MW of projects p.a., and (4) expand the Service segment's wind and PV projects management capacity from 2,200 MW to more than 3,500 MW. An updated sum-of-the-parts valuation yields an unchanged €26 price target. Due to the share price slump following Morgan Stanley's announcement, we upgrade our rating from Add to Buy, as the upside potential is now >25%.
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