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May 22nd, 2023 | 09:45 CEST

Siemens Energy, Saturn Oil + Gas, TUI - Powerful potential

  • Mining
  • Oil
  • Gas
  • Energy
  • Travel
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The markets are ignoring the uncertainty. Despite negotiations not yet concluded due to the increase in the debt ceiling in the USA and other geopolitical dangers, the leading German index DAX posted a new all-time high. The bulls continue to react, and the crash prophets have to admit defeat so far. Optimism also continues to prevail among individual stocks.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0 , Saturn Oil + Gas Inc. | CA80412L8832 , TUI AG NA O.N. | DE000TUAG505

Table of contents:

    Siemens Energy - Loss thanks to subsidiary

    Although strong headwinds blew from Spain at the beginning of the week, the share of the Munich-based power engineering company Siemens Energy closed the week with a gain of almost 10% and a new high for the year of EUR 24.24. Analysts see further upside potential after the figures for the second quarter. The US bank JP Morgan raised the price target from EUR 25 to EUR 28 with an "overweight" rating. The strong order intake provides more predictability for future revenues. The Swiss bank UBS, on the other hand, reiterated its price target of EUR 25 and its "buy" rating. The Munich-based company had clearly beaten expectations with all key figures in the second business quarter.

    Due to a strong increase in losses of the Spanish subsidiary Siemens Gamesa, the parent company Siemens Energy had to adjust its forecasts for the current fiscal year, which ends on September 30, downwards. The Munich-based company announced that the net loss compared to the previous year could not be kept at the level of minus EUR 712 million as forecast at the beginning of the year. Instead, it is expected to be higher by a low three-digit million amount. Furthermore, the profit margin before special effects is likely to be at the lower end of the forecast range of 1% to 3%.

    Nevertheless, Siemens Energy is seeing strong demand in all business areas and significantly increased sales targets. When taking into account exchange rate and portfolio effects, revenues are expected to increase by 10% to 12%, in contrast to the previously assumed 3% to 7%.

    Unabated growth at Saturn Oil & Gas

    With the release of figures for the first quarter of the 2023 financial year, the Canadian energy company revealed disproportionately strong growth compared to the same period last year. Several records were broken in the process. For example, 17,783 boe per day were produced in the first three months, about 140% more than in the first quarter of 2022. Due to the acquisition of the Ridgeback properties in the first quarter, daily production should be expanded to about 30,000 boe per day in the current second quarter, according to management.

    Meanwhile, adjusted EBITDA climbed to CAD 70.4 million, compared with CAD 16.3 million in the same period from 2022, representing a performance of 332%. Admittedly, two transformative acquisitions were responsible for the extreme performance. Despite weaker oil prices, revenues increased from CAD 69.1 million to CAD 131.4 million. The CAD 97.6 million net loss in the first year of 2022 was turned into a net profit of CAD 219.1 million. As of March 31, 2023, the earnings per share stood at CAD 1.58 per Saturn share, which is currently trading at CAD 2.25. In a sector comparison, the stock appears to be strongly undervalued. The analyst firm Eight Capital pointed out the undervaluation in its most recent study and assigned a price target of CAD 7.50. First Equity Research also sees a significant undervaluation, giving the oil producer a target price of CAD 6.30.

    The successful acquisitions are not reflected at all in the price of Saturn Oil & Gas. Source: Refinitiv Eikon, as of 19.05.2023

    TUI AG - Analysts see higher prices

    The share price did not want to take off after the capital measure, which was completed at EUR 5.55. Although the share is working on bottoming out, a breakout above the first weaker resistance area at EUR 6.49 has so far eluded the share. Instead, this level was increasingly used for further sell-offs. At the end of the week, the shares of the tourism and travel group were trading at EUR 6.08.

    The US investment bank Morgan Stanley commented positively, upgrading the Hanover-based company from "underweight" to "equalweight". The price target was left at GBP 7.40, the equivalent of EUR 8.51. According to analyst Jamie Rollo, the share is trading well below its target price. Although there are still longer-term concerns about the operating business and free cash flow, this seems to have already been factored into the prices. The tourism group's latest quarterly figures hint at possible forecast increases.

    Siemens Energy posted significant gains despite a profit warning due to higher losses at its Gamesa subsidiary. TUI continues to work on bottoming out. Saturn Oil & Gas reported significant jumps in earnings compared to the previous year.

    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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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