First Berlin Equity Research has published a research update on PNE AG (ISIN: DE000A0JBPG2). Analyst Dr. Karsten von Blumenthal reiterated his REDUCE rating and increased the price target from EUR 15.20 to EUR 18.10.

PNE has reported Q3 results and held a conference call. Q3 figures were in line with our forecasts. Sales increased 82% y/y and EBITDA amounted to €3.6m versus €-0.6m in the prior year period due to strong power production figures. PNE has confirmed 2022 EBITDA guidance of €20m – €30m. With 9M/22 EBITDA of €21.1m, PNE is already within the guidance range. As wind conditions are seasonally strong in Q4 and PNE plans to conclude project sales before the end of 2022, we expect the company to exceed guidance. The German government plans to impose a tax on power producers‘ so-called windfall profits from various sources, among them wind and solar. This could lower PNE’s power production earnings from December 2022 on. An updated sum-of-the-parts valuation yields a new price target of €18.10 (previously: €15.20). PNE’s share price has more than doubled since March and has recently been driven by takeover speculation since the largest shareholder has announced that he wants to sell his 40% stake. Given the 10y high in the share price and the high valuation of the stock (consensus 2023E EV/EBITDA: 32x), our rating remains Reduce.