August 17th, 2022 | 13:05 CEST
Over 200% share price potential? Analysts on BioNTech, BASF and Saturn Oil + Gas
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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: Analysts see over 200% share price potential
After a virtual roadshow, analysts at Eight Capital are confident in the potential of Saturn Oil & Gas shares. With a target price of CAD 7.50, they recommend buying the shares of the Canadian oil producer. Currently, the share is quoted at CAD 2.37. Saturn Oil & Gas is on track to create additional value from the acquired assets. Therefore, the current valuation is a buying opportunity. The market is still paying too little attention to free cash flow growth and the possibility of debt reduction. Moreover, there would be other internal catalysts to justify a re-rating of the stock.
Ongoing extended reach horizontal drilling at the Viking project would significantly increase profitability. This could also be applied to the Alberta project. These are examples of the Company being a world-class operator. Saturn Oil & Gas is on track to meet its second-half 2022 production guidance of 12.3 MBOE/d. With that, analysts also expect the free cash flow to turn around. They added that the valuation and FCF return profile of Saturn Oil & Gas continues to be at a WTI price of USD 65. Free cash flow is expected to increase to CAD 131 million as early as next year. Currently, the entire company is valued at CAD 140 million. Interesting: Investor legend Waren Buffett also seems convinced by the oil sector. The Oracle from Omaha has consistently increased his stake in the US oil company Occidental in recent months.
BioNTech stock USD 312 or just USD 200?
The BioNTech share is currently digesting the slightly disappointing quarterly figures. The analysts at Berenberg expect that the share price could soon head north again. They have renewed the buy recommendation and set a price target of USD 312. The sales target with the COVID-19 vaccine is still achievable, even if the revenues in the second quarter were below expectations. The booster vaccines adapted to new variants are expected to be approved by the authorities in the US and Europe in September. The order books should then also fill up again quickly. Goldman Sachs analysts are more cautious about BioNTech's potential. They rate the stock as "Neutral" with a price target of USD 200. After second-quarter revenue and earnings figures came in below expectations, earnings forecasts for 2022 to 2025 were reduced. Currently, the BioNTech share is trading at around EUR 160.
BASF: Can raw material and energy prices be passed on?
Low levels, high energy prices, a gas levy and an impending gas shortage in winter: Hardly any German company is suffering as much as BASF from the current situation. And with the Company, so are its shareholders. The share is trading at EUR 44, not far from its 5-year low. And yet, against the immense risks, it is surprising that the analysts at Bernstein still see a price potential of over 50%. Their optimism is based on BASF's US agricultural business. The latest US Department of Agriculture data on corn and soybean inventories suggest that the German group's business is picking up. Therefore, the analysts have set a price target of EUR 72. UBS, on the other hand, advises selling BASF shares. Their price target is EUR 37. Although the chemical group is better prepared for the low water levels of the Rhine than in 2018, production restrictions can no longer be ruled out. In particular, the supply of coal is a cause for concern.
BioNTech is currently recovering from relatively weak quarterly figures and could generate new share price gains in the fall with its new booster vaccines. Should Saturn Oil & Gas achieve a free cash flow of CAD 131 million in the coming year - as expected by Eight Capital - the stock would be a real bargain. At present, only investors with strong nerves are likely to buy BASF.
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