September 26th, 2022 | 12:57 CEST
Hypoport, Saturn Oil + Gas, Deutsche Bank - Hard-hitting announcements from analysts
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Saturn Oil & Gas - Optimistic voices
If one goes by the analysts who rate the fast-growing energy company Saturn Oil & Gas, there is a clear 200% opportunity compared to the current price level of CAD 2.42. Analyst firm Velocity Trade Capital sees the Canadians as an "outperformer" with a price target of CAD 7.19, while Eight Capital gives the up-and-coming oil producer a "buy" rating and a price target of CAD 7.50.
The rapid growth of Saturn Oil & Gas is worth highlighting. Within 18 months, acquisitions have boosted oil and gas production from 233 barrels per day in the first quarter of 2021 to 12,000 barrels per day today. By the end of next year, the daily production rate is expected to be between 13,950 and 14,550 barrels.
After taking over the target areas and the exorbitant increase in production, EBITDA in 2023 is expected to be CAD 252 million. That will allow the Company to significantly accelerate debt reduction with 50% of the surplus. By the third quarter of 2024, the debt capital raised for the acquisitions should then have disappeared entirely from the balance sheet.
As a result of its enormous growth, Saturn Oil & Gas has also qualified for trading on the OTCQX Best Market in the USA. To qualify, companies must meet high financial standards, apply best-practice corporate governance procedures and demonstrate compliance with applicable securities laws. The upgrade is important both to increase stock liquidity and make it easier for US-based investors to participate in a growing Canadian energy producer committed to responsible resource development.
Interested investors can learn more details about Saturn Oil & Gas' success story tomorrow, Tuesday, September 27, at the virtual 4th IIF -International Investment Forum. Kevin Smith, VP Corp Dev, will be presenting the Company. To register, visit ii-forum.com.
Hypoport - Another low blow for the real estate industry
The strict monetary policy of the central banks with rising interest rates has arrived in the real estate industry in Germany. The financial broker Hypoport, which was still clinging to its annual targets of expected revenue of EUR 500 to 540 million and an operating profit of between EUR 51 million and EUR 58 million in August despite the expected interest rate hikes, felt the full force of this. The Company now had to admit that the outlook would be "clearly missed".
The reason for this is the continued weak demand for products in private and institutional real estate financing as well as in the corporate finance business. The sharp rise in interest rates, growing fears of inflation and concerns about a deep recession are holding consumers back from corresponding transactions. As a result, the SDAX-listed company expects revenues to decline in the third quarter, but earnings before interest and taxes are expected to "break-even".
In the wake of this bad news, Hypoport's shares lost around 50% of their value under high volumes. Since the highs in September last year, when the share was quoted at EUR 612.80, the stock has lost a total of around 90% of its market value. The share is currently trading at EUR 79.30. For the analysts at Hauck Aufhäuser Investment Banking, even this level is still too high. After the devastating profit warning, analyst Simon Keller downgraded the stock from "Hold" to "Sell" and lowered the price target from EUR 205 to currently EUR 70. In the wake of the crisis in the real estate market, investors in Hypoport should remember the old stock market adage: "Do not try to catch a falling knife!".
Deutsche Bank - Profiteer of rising interest rates
In contrast to the leading platform in the financing sector, Hypoport, Deutsche Bank is benefiting from the tighter monetary policy of the central banks. The US investment bank Goldman Sachs also sees this and continues to rate the Frankfurt-based company with a "buy" rating and a price target of EUR 17.30. Analyst Chris Hallam examined the European banking sector concerning the rise in interest rates and the threat of recession. The valuation of many sector stocks is low. Therefore, he sees a lot of potential in the sector in general. Deutsche Bank is one of the favorites.
Despite the changed conditions, Deutsche Bank is sticking to this year's revenue targets. In contrast, management is becoming somewhat more cautious for the coming year - CFO, James von Moltke, urged caution at a conference. According to the Reuters news agency, the CFO said that a difficult time was ahead for private households and companies. However, the turnaround in interest rates compensated for the lost growth in the bank, Von Moltke explained, forecasting a jump in revenue of EUR 700 million due to higher interest rates. On the other hand, he said, the climate for M&A business and IPO advisory was somewhat unfavorable. However, he said that investment banking remains an important constant with revenues of EUR 2.5 billion in the third quarter.
Due to the uncertainties surrounding the recession, high inflation and rising production costs, it is difficult for many companies to maintain the forecasts they announced at the beginning of the year. Hypoport had to concede its estimates for 2022, while Deutsche Bank can benefit from the increased interest rate level. In contrast, Saturn Oil & Gas reached a milestone of 12,000 barrels per day in production, which is expected to be topped by the end of the year at 12,500 barrels.
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