August 16th, 2022 | 10:40 CEST
Analysts enthusiastic about figures - K+S, Meta Materials, Deutsche Telekom
Table of contents:
K+S AG - Still considerable room for improvement
As one of the main beneficiaries due to the sanctions resolved against Russia, the share of the world's fifth largest potash producer was able to more than double to a high of EUR 36.45 in the first weeks of the Ukraine conflict. The supply shortage created by politics and the ban on the Russian and Belarusian producers Uralkali and Belaruskali, respectively, which in the past accounted for about one-third of potash production worldwide, caused prices to explode.
However, the soaring prices did not last long. After natural gas, vital for potash production, fell significantly at the end of March, potash prices fell with it and with them the share of Kassel-based K+S AG. Since the low of EUR 18.90 at the beginning of July, all gains in the share price have been lost. The share has been tinkering with the formation of a bottom since then. The publication of the figures for the second quarter and the first half of the year provided the K+S share with a tailwind for the start of a renewed rise.
In the months from April to June, the MDAX-listed company reported a doubling of revenues to EUR 1.5 billion compared with the same quarter of the previous year. EBITDA also climbed sharply to EUR 706 million. In the first half of the year, revenues reached EUR 2.7 billion and EBITDA EUR 1.2 billion.
For the current fiscal year, management continues to expect EBITDA of between EUR 1.6 billion and EUR 1.9 billion. Adjusted free cash flow should be between EUR 600 million and EUR 800 million. "We confirm our previous EBITDA forecast for the 2022 financial year, even if, as assumed in our scenario, there should be bottlenecks in the availability of natural gas and a gas surcharge in the fourth quarter", said Dr Burkhard Lohr, Chairman of the Executive Board of K+S Aktiengesellschaft, during the publication of the quarterly figures.
Following the publication of the figures, the majority of analysts were convinced and issued price targets far above the current price of EUR 21.61. DZ Bank, for example, reiterated its "buy" recommendation with a target price of EUR 37. The Frankfurt-based analysts of Deutsche Bank Research assigned the same target price and issued a "hold" recommendation.
Meta Materials - Sales explode
Last year, the Nasdaq company was one of the beneficiaries of the meme share hype around GameStop and AMC Entertainment. The share price rose to a high of USD 21.76 within a few weeks. Since then, the chart has been letting off quite a bit of steam. The "Lux Research Innovator of the Year 2021" fell by around 95% to a price of USD 0.98. The Canadians are currently successfully redefining the future of coating materials. With research into novel high-performance materials, it will be possible in the future to redirect light, sound, heat or radio waves using special nanotechnology. In doing so, the technology has multiple applications and can be used by global customers in various industries such as 5G communications, health and wellness, aerospace, automotive and renewable energy. In addition, its proprietary nano-optical technology provides anti-counterfeiting security features for government documents and currencies and brand authentication.
By patenting the developed products, the market leader has a multi-year head start in development. With the filing of two new US patents related to second- and third-generation nanoporous ceramic battery separators and the patent portfolio acquired with the Optodot acquisition, META now has 410 active patent documents, including 251 issued patents and 159 pending patent applications. META's patent portfolio includes 98 patent families, 57 of which contain at least 1 issued patent.
Nominated by Knight Inc. for the "50 Fastest Growing Sustainable Companies in Canada", the research firm saw an explosion in sales in its recently released second quarter and first half numbers, respectively, demonstrating once again that its diverse products are being embraced by its global clientele. In the second quarter of 2022, Meta Materials saw total revenue increase by 432% to USD 3.3 million. In the same quarter last year, this figure was only USD 624,320. Revenue also surpassed the first quarter by another 12%. As is usual for a growth company with high development spending, expenses exceeded profits, and the net loss reached just under USD 21 million, or 7 cents per share. However, USD 3.5 million of this was spent on the Optodot acquisitions alone, and USD 7.2 million was invested in property, plant and equipment. As a result, as of June 30, the nearly debt-free company's cash equivalents totaled USD 55.3 million.
Meta Materials is a bet on the future with the potential to multiply. The patents and already growing clientele give the Canadians a competitive advantage. The market capitalization is currently USD 354.70 million.
Deutsche Telekom - Forecasts raised
The relative strength of the shares was followed by equally strong quarterly figures. Since the beginning of the year, the Bonn-based company has gained around 23% despite stock market corrections and the Ukraine conflict. Group sales grew by almost 6% to EUR 28.2 billion in the second quarter. Earnings before interest, taxes, depreciation and amortization, including leasing costs (EBITDA AL) adjusted for special factors, increased by 5% to EUR 9.9 billion. Net profit fell by around 22% to just under EUR 1.5 billion due to the costs resulting from the merger of the T-Mobile US subsidiary with Sprint and a settlement following a hacker attack.
Operating profit forecasts for the full year 2022 were raised once again, with EBITDA AL now expected to increase to around EUR 37 billion in the current year, the DAX-listed company announced in Bonn on Thursday. Previously, the telecommunications group assumed more than EUR 36.6 billion after an initial increase. In 2021, Telekom generated an adjusted operating profit of EUR 36.5 billion on a pro forma basis. The free cash flow, including leasing costs (free cash flow AL), on the other hand, should continue to be more than EUR 10 billion. Last year, Deutsche Telekom achieved a figure of EUR 8.4 billion for this indicator.
Here, too, analysts were optimistic. Deutsche Bank Research continues to rate the share as a "buy" and reiterated its price target of EUR 26.50. By contrast, the major Swiss bank Credit Suisse continues to see the T-Share as an "outperformer" and increased its price target from EUR 21 to EUR 23.
The reporting season for the second quarter is entering its final phase. Two companies, K+S AG and Deutsche Telekom, impressed analysts. As expected, a significant loss was reported for the growth stock Meta Materials. However, due to its high level of innovation, the Company is attractive in the long term.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.