July 6th, 2022 | 12:23 CEST
Aspermont, SAP, E.ON - Market leaders for challenging times on the stock markets
Table of contents:
SAP - Berenberg starts coverage with buy recommendation
Since the beginning of the year, the shares of Europe's largest software company have lost a good quarter of their value. On the one hand, this reflected the challenging market situation; on the other hand, weak quarterly figures did not particularly please the stock market players.
SAP is one of the world's leading business software providers and supports companies of all sizes and industries. Machine learning, the Internet of Things and advanced analytics are core to the solutions portfolio. Cloud-based applications play a key role in this. This positioning enables the Germans to achieve scalable and high-margin growth. Nevertheless, growth initially requires high investments, which recently exerted greater than expected pressure on margins. The operating margin in the cloud business slipped 3.7 percentage points to 23.7%.
Nevertheless, many analysts agree that the group is advantageously positioned, and the stock has upside potential. Most recently, the private bank Berenberg gave the stock a "buy" rating and a target price of EUR 110 - an upside potential of around 30%. According to the experts, SAP is benefiting from rising demand due to the digital transformation, and the cloud business is also gradually gaining in importance. As a result, free cash flow should increase to over EUR 8 billion in 2025.
Aspermont - A market leader from Down Under
The Australians can confidently be taken as a prime example of successful digital transformation with the establishment of highly scalable business models. With Mining Journal and Mining Magazine published for well over 100 years, Aspermont is the leading industry address.
Based on a XaaS model, Aspermont distributes high-quality content to a growing group of corporate customers. The decisive asset is the data pool of around 8 million decision-makers from the mining, energy and agricultural sectors. Based on this, user behaviour patterns are marketed, and leads are generated. In addition, Aspermont offers content, advertising, sponsoring and events. A subscription model enables predictable cash flows, and premium content is also on offer.
With the founding of the "Blue Horseshoe" platform together with partners Spark Plus and International Pacific Capital, the Australians have entered the fintech sector. Institutional investors are given the opportunity to invest in companies here. Aspermont owns 44% of the joint venture.
The operating figures of the group look good. In the first half of the year, revenues increased to over AUD 9 million, and net liquidity amounted to AUD 6.6 million as of the reporting date. Currently, the shares are trading at AUD 0.018. The analysts at GBC attest the share a significant upside potential with a price target of AUD 0.11. A detailed update on the Company and the published quarterly data can be found in the researchanalyst.com update on Aspermont.
E.ON - Backbone of the energy transition
The security of the supply of energy and raw materials has taken on great political weight due to the war in Ukraine and the high level of dependence on Russia. The turbulence can also be seen on stock exchanges around the world. The turn towards more energy from renewable sources is a crucial step. According to the latest calculations by the industry association BDEW and the Stuttgart-based research institute ZSW, renewable energy sources covered 49% of Germany's electricity consumption in the first half of the year. That represents a pleasing increase of 6 percentage points compared with the same period last year. Wind energy continues to play the most significant role here.
Too often forgotten in the discussion about the energy transition is the infrastructure required for it. As a major network operator, E.ON forms the backbone of the energy transition. Increasing decentralized energy generation and integrating these sources into the grid (smart grids) represent a key challenge for the future. Here, E.ON has the right answers. The valuation level of the stock is inviting, with a 2023 P/E ratio of 10 and a dividend yield of over 6%. Analysts believe the share has an upside potential of 45% over the next 12 months.
Companies with good market positioning are worth a look in any market phase. That applies to top dogs such as SAP and E.ON but also to promising second-tier stocks. Aspermont stands out within this category. The earnings potential of the new investment platform should soon be reflected in the figures. Analysts believe the share has the potential to multiply.
Conflict of interest
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