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November 23rd, 2023 | 07:40 CET

Buy now? Morphosys, Siemens Energy and Desert Gold share

  • Mining
  • Gold
  • renewableenergies
  • Biotechnology
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What do renewable energies, biotech and gold have in common? Shares from these sectors have predominantly experienced significant losses in 2023. Morphosys, Siemens Energy and Desert Gold are examples of this. However, the underperformers in the current year are often among the top performers in the upcoming year. Can this apply to these three shares? In the case of Morphosys, the latest study data has been confusing, and the share has given back its gains of the year. Analysts are now expressing their views. Siemens Energy has lost over 30% of its value due to operational problems, and the price targets of the experts vary widely. Explorer Desert Gold has been quiet recently. Is it the calm before a price jump? In any case, the share is anything but expensive.

time to read: 3 minutes | Author: Fabian Lorenz

Table of contents:

    Nick Luksha, President, Prospect Ridge Resources
    "[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources

    Full interview


    Desert Gold: Calm before a price jump?

    The gold price is currently consolidating but remains above USD 1,800 per ounce. This means that an increase of around 10% is still possible for 2023 as a whole. Over the past 5 years, the performance has been about 70%. However, the shares of gold producers are a long way from such gains. Exploration companies, in particular, are now trading well below their gold resources. One such company is Desert Gold, with a share price of EUR 0.024, and the market capitalization (including options and warrants) is only EUR 6.71 million. This compares with an identified gold resource of around one million ounces. It may only be a matter of time before one of the major producers comes knocking for a takeover. Desert Gold is active in an exciting region in West Africa. The Canadian company's SMSZ project in Mali covers an area of 440 sq km and is located in the vicinity of major gold companies such as Barrick Gold and B2Gold.

    Will the increase in the gold resource boost the share price? Very likely. And positive news is expected soon. Desert Gold initiated another drilling program at the beginning of this year, and there should be an update soon. At the time, CEO Jared Scharf stated: "The Mogo South drill program is the first step in trying to answer one of the most important questions about the SMSZ project: Does Mogo South have the potential to become a multi-million ounce gold deposit consistent with the regional gold deposits near the Senegal-Mali shear zone?".

    Morphosys: Pelabresib only for the niche?

    Until Tuesday of this week, Morphosys shareholders could be reasonably satisfied with the development of the share. In an otherwise weakening sector, the shares of the German biotech veteran were among the winners in 2023, with an increase of around 100%. Then, study results caused confusion, and the share price plummeted. The study data on the promising drug pelabresib was not convincing. Following a conference call, two analysts have come forward and tried to put the situation into perspective.

    The UBS analysts confirm that there are many unanswered questions about the efficacy of pelabresib. In particular with regard to the efficacy of the cancer drug in the high-risk group of myelofibrosis patients. These details are expected to be available in mid-December and will be published at the annual meeting of the American Society of Hematology (ASH). Until then, UBS continues to recommend the Morphosys share as a Buy. The target price is EUR 47.

    Goldman Sachs, on the other hand, has almost halved the target price from EUR 33.50 to EUR 17.50. The rating remains at "Neutral". The sales estimates for pelabresib have been significantly reduced. From the analysts' point of view, the cancer drug will be approved but will likely only be helpful for myelofibrosis patients. The market potential would, therefore, be limited significantly.

    Siemens Energy: Analysts divided

    The latest analysts' opinions at Siemens Energy are divided following the recent Capital Market Day. On Tuesday, the Managing Board of Siemens Energy personally explained the current situation and future strategy. Overall, demand for the Group's technologies is high. In addition to wind turbines, Siemens Energy manufactures gas and steam turbines, generators and transformers. The Group intends to massively reduce costs, particularly at its subsidiary Gamesa, in order to return to profitability by 2026. Gamesa is expected to post a loss of EUR 2 billion in the current year, which cannot be fully absorbed by the other parts of the Group. A dividend is to be paid out again as soon as possible.

    Although Goldman Sachs has lowered its price target for the share from EUR 20.50 to EUR 18.60, it maintains its Buy recommendation. On the one hand, the financing risks have been reduced by the support from the German government and Siemens. This will allow the Company to concentrate more on working through its order backlog. Overall, the energy technology group is well-positioned to create value again.

    Bernstein Research is more cautious. From the analysts' point of view, the Capital Markets Day did not provide any clarity about the situation and prospects of Gamesa. Their price target for the Siemens Energy share is EUR 12, and the analysts rate the stock as "Underperform".

    It is difficult to assess whether all of Gamesa's problems are now on the table. If so, the Siemens Energy share certainly has potential. Pelabresib is the sole beacon of hope for Morphosys. The share's potential may be limited if the drug can only be used in a niche market. In the case of Desert Gold, the opportunities appear to outweigh the risks significantly.

    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.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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