January 13th, 2022 | 12:45 CET
TeamViewer, Saturn Oil + Gas, BP - Target price USD 100
Table of contents:
"[...] The Oxbow Asset now delivers a substantial free cash flow stream to internally fund our impactful drilling and workover programs. [...]" John Jeffrey, CEO, Saturn Oil + Gas Inc.
Saturn Oil & Gas - Opportunity seized
Rising demand is meeting with low supply, thus reducing the nationwide crude oil stocks in the US. Investors took the news from the American Petroleum Institute (API) and bought oil contracts, which brought the price back to its highs for the year after a short and sharp correction. Canadian oil producer Saturn Oil & Gas was spot on with its strategy of the past year. With the purchase of the Oxbow properties in the Canadian province of Saskatchewan, the production capacity was increased twenty-fold to 7,000 barrels per day, which corresponds to a daily turnover of USD 487,000.
The milestone in the development already became clear when the Q3 figures were announced. Saturn Oil & Gas increased its operating cash flow by more than a factor of 13 to CAD 13.9 million compared to the same period last year, which corresponds to a cash flow of CAD 0.55 per share. Currently, the entire company is worth just under CAD 90 million on the stock exchange, and the share price is CAD 3.49.
For the experts of the analysis house GBC AG a clear undervaluation of the share is present here. The maturity of the Oxbow asset and the low decline rate of 12% give Saturn Oil & Gas flexibility for future investments writes analyst Julien Desrosier in an available study. The analyst upgrades the price target from CAD 9.20 to CAD 12.17 after the announcement of the figures, and the investment rating is BUY!
TeamViewer - Some relief
Meanwhile, US bank JP Morgan is positive on TeamViewer's stock, leaving the share at "overweight" and reiterating its price target of EUR 21 after the publication of the quarterly figures. According to analyst Stacy Pollard, the software provider showed an unexpectedly solid performance in the fourth quarter. However, a more substantial share price recovery would require similar operational developments in the coming quarters.
Investors also reacted to the presentation of the preliminary figures with buy orders, pushing TeamViewer shares, which had been badly battered recently, up by around 17% to EUR 13.55. At least the announced savings program showed an effect, according to which the forecasts, which had been revised downwards twice this year, could be met. Earnings before interest, taxes, depreciation and amortization adjusted for special effects are expected to be between EUR 254 million and EUR 257 million in 2021, which means a margin of around 47% in sales billed (billings). Billings increased by 19% to around EUR 548 million in the year as a whole.
The Goeppingen-based company will provide detailed information on the full year on February 2. The preliminary figures are solid, and the stock market's reaction after a long bearish valuation is normal. Possible short-coverings could also have further strengthened the price gains. However, in the long term, TeamViewer must regain investor confidence with further solid figures. We are skeptical that the short-term effects of the cost-cutting programs will continue to have a positive long-term impact. In addition, another negative surprise could be the decline in billings. Thus, the party mood could quickly evaporate.
BP - Further in the height rapture
The enormously rising oil prices are grist to the mills of the large oil producers such as BP. At GBP 381, the oil giant stands at its annual high and is about to break through the resistance area at GBP 400. Lydia Rainforth, an analyst at the British Barclays Bank, believes this will happen and has raised the price target from the current 500 to 700 British pence. The expert's verdict is "overweight".
In addition, the British have confidence in their own company. According to the oil multinational, it intends to acquire its own share certificates on the stock exchange for up to USD 500 million by February 7. The program is intended to reduce the outstanding share capital to compensate for the dilutive effects of employee share programs.
Oil prices are booming and are attacking the psychologically important USD 100 mark. Producers such as BP and Saturn Oil & Gas are the primary beneficiaries. TeamViewer is also in a celebratory mood after the announcement of its figures. It remains to be seen how long the party will last.
Conflict of interest
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