New share price horror at Bayer, price explosion at CropEnergies and GoviEx Uranium

GoviEx Uranium: Investors convinced of the potential

Uranium was one of the investor favorites in 2023. The price climbed to its highest level since 2008, and there is no end in sight. That is because numerous countries are investing billions in the construction of new nuclear power plants. As the Climate Conference in Dubai demonstrated, nuclear energy is an important component for many on the road to CO2-free energy. It is, therefore, clear that uranium will continue to be a highly sought-after commodity in the next 50 years - and probably beyond. Investors can also benefit from this.

The African continent is of great importance as a source of uranium for the operation of old and new reactors. The Canadian exploration company GoviEx Uranium is active in this region, with projects located in Mali, Zambia, and Niger, providing diversification. GoviEx aims to become a uranium producer in the coming years. The Muntanga project in Zambia, in particular, should contribute to this. GoviEx already has a mining permit there and has made good progress this year. As a result of positive drilling results, the measured and indicated resources have tripled. The quantity and quality of the uranium deposit are so promising that the Company intends to achieve an attractive profit margin even at a uranium price of USD 50 per pound, according to the preliminary profitability assessment. Currently, the price is trading at over USD 89.

GoviEx raised fresh capital a few days ago in order to advance its projects in the coming year. They raised CAD 12 million through shares priced at CAD 0.16 and warrants at CAD 0.21. Currently, the share is trading at CAD 0.155, offering a 35% potential increase to the warrant price. Investors participating in the capital increase anticipate significant growth in the share in the coming year.

Bayer: Can it drop to EUR 25?

Although Bayer shares are trading at just over EUR 30, the lowest they have been in the past 5 years, there is little hope for rising share prices. The risks of possible billion-dollar payments related to the glyphosate and PCB litigation in the US simply cannot be eliminated. Moreover, the development of the hopeful candidate Asundexian, a blood coagulation inhibitor, has been discontinued. This refocused attention on the medication pipeline, revealing a lack of new developments compared to expiring patents.

The recent analyst comments have been correspondingly pessimistic. Following Bayer's renewed defeat in a US lawsuit concerning alleged health damage caused by the chemical PCB, UBS sees no potential with a price target of EUR 34. The analysts pointed out that Bayer will likely appeal but has hardly made any provisions for the PCB issue so far. Particularly bearish is HSBC, whose analysts recently shaved their price target from EUR 38 to EUR 25 and downgraded Bayer shares from "Hold" to "Reduce".

CropEnergies surprises with 70% share price increase

CropEnergies shareholders were in for a treat yesterday, December 20. The share price rose by almost 70% to EUR 11.50. The reason is that majority shareholder Südzucker wants to delist the Company from the stock exchange and has made a takeover bid. Südzucker intends to pay the remaining shareholders of the biofuel producer EUR 11.50 per share. The day before the takeover bid, the CropEnergies share closed at EUR 6.75, its lowest level since March 2020. The takeover bid will at least allow shareholders to essentially recoup the share price losses from 2023. The share price was EUR 12.80 at the beginning of the year.

Südzucker shares reacted to the announcement with a slight increase of 3% to EUR 14.29. Initial analyst reactions welcome the takeover bid, but the experts' investment case remains unchanged. Warburg maintains its "Buy" recommendation with a target price of EUR 17.30, and Barclays has a "Sell" recommendation with a target price of EUR 12.

With the takeover offer, shareholders of CropEnergies at least have a conciliatory end to the year. At GoviEx, on the other hand, the focus is on 2024. The capital increase has secured further financing, and the high price of the warrants should also boost the share. The real price driver is, of course, the uranium price. The only thing speaking in favor of the Bayer share is that everything seems to be against it.