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October 12th, 2022 | 11:33 CEST

TUI share soon to be a penny stock? BASF, BioNTech, Cardiol Therapeutics - buy or sell?

  • Biotechnology
  • chemicals
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Buy or sell? It is not only the BASF share that is currently the subject of clearly differing opinions. While the gas price brake plans on Monday caused euphoria among investors and correspondingly rising prices for the shares of the chemical company, analysts from Goldman Sachs and Morgan Stanley continue to express pessimism. Experts are similarly cautious about the prospects for TUI. UBS even sees the share of the tourism group on the way to becoming a penny stock. Analysts are more optimistic about BioNTech, but the share is not making any headway at the moment. In contrast, experts see massive upside potential in the biotech gem Cardiol Therapeutics. Cash is now equal to market capitalization, and drug development is making progress.

time to read: 4 minutes | Author: Fabian Lorenz

Table of contents:

    Cardiol Therapeutics: Price USD 0.80 and Target Price USD 7

    According to analysts at Canaccord Genuity Capital Markets, the shares of Cardiol Therapeutics are massively undervalued - the price target significantly exceeds the market capitalization. The biotech company specializes in cardiovascular diseases, and its lead product CardiolRX, which is in Phase II, has great potential. The market for fighting cardiovascular diseases is enormous. The manufacturer of the marketed comparator Epidiolex was acquired for USD 7.2 billion. CardiolRx is expected to be superior to that drug, they said, because it uses highly purified cannabidiol. The analysts expect CardiolRx to be launched in late 2023 and forecast sales of USD 161.3 million in 2028, so they recommend the Cardiol share with a price target of USD 7. Currently, the stock is trading at USD 0.80 on the NASDAQ. In addition, the analysts point out that the Company has more than USD 50 million in cash. For classification, the market capitalization is also at this level.

    On the road to approval, Cardiol Therapeutics announced positive study results a few days ago. According to the results, the active pharmaceutical ingredient ("API") contained in CardiolRx was shown to inhibit and also promote the reversal of those mechanisms known to play a role in the initiation and development of cardiac fibrosis (fibrotic CVD). "Our research partners at Houston Methodist DeBakey Heart & Vascular Center previously demonstrated that CardiolRx exerts a protective effect on cardiac function in a preclinical disease model of heart failure. Results of the latest study provide further evidence of CardiolRx's cardioprotective properties, suggesting antifibrotic mechanisms with therapeutic potential in heart failure," said Cardiol CMO Dr Andrew Hamer. "Together with the in vivo preclinical data already available on anti-inflammatory activity, these results confirm our plans to accelerate the development of a novel subcutaneous formulation of CardiolRx for use in heart failure."

    Is TUI on the way to becoming a penny stock?

    TUI's share is currently trading at around EUR 1.25 in Germany. UBS believes it could soon go below the 1 mark, at least in GBP. The analysts have reduced their price target for the travel and tourism group from 153 pence to 99 pence. The rating is "sell." The analysts expect that the threat of recession will lead to a decline in demand for vacation travel. They have reduced estimates for 2023 and 2024. They said the market's expectations for TUI's free cash flow were too optimistic. Bernstein Research was somewhat more optimistic. The analysts refer to the new TUI CEO. At an investor conference, he had referred to sustained robust demand in the fall. The Company is preparing for a possible economic downturn by improving its balance sheet. Bernstein Research rates the TUI share as "Market-Perform" and gives a price target of 170 pence.

    BASF: UBS recommends selling

    The BASF share has been volatile this week. On Monday, the more concrete proposal of the gas price brake initially caused a jump in the price. Energy-intensive energy industries were expected to benefit from the German government's plans. But just one day later, the share of the Dax group lost more than 3% again and slipped below the mark of EUR 42. In an industry study, Morgan Stanley expressed skepticism about the prospects of the German chemical giant. After the chemical industry successfully withstood external influences for six quarters, it is becoming increasingly difficult. Demand is weakening, and margins are coming under pressure. Although some of this has already been priced into the share, the analysts do not see any sustainable upside potential for the sector. The analysts at Goldman Sachs also see no reason why BASF shares should be bought. BASF and Covestro would probably benefit most from the gas price brake, and positive EBITDA is certainly possible in the coming year. Goldman Sachs' price target for BASF is EUR 43. In contrast, UBS sees downside potential. They consider a price of EUR 37 appropriate and therefore recommend selling.

    BioNTech: Expansion in Australia without momentum, but price target of USD 312

    It is quiet at the moment with the BioNTech share. Even the expansion in Australia does not provide new impulses. BioNTech has signed a letter of intent for a strategic partnership with the Australian state of Victoria. According to this, the German BioNTech flagship wants to research its mRNA-based vaccines and therapies in Victoria and subsequently also produce them. Thus, research laboratories and a production facility for mRNA drugs are to be established in Melbourne. "Science and innovation can only make a difference if they can be applied outside the lab and reach people around the world. This partnership is a major step forward in providing access to mRNA technology and fostering collaboration in the Asia-Pacific region," said BioNTech CEO Ugur Sahin. BioNTech shares are currently trading at around EUR 140. Analysts had hardly had anything to say recently. At least the last comment from Berenberg was positive. BioNTech has considerable cash reserves and is prepared to share them with shareholders. Therefore, further high dividend payments are to be expected. Thus, the analysts recommend BioNTech shares as a buy with a price target of USD 312.

    A purchase of TUI and BASF is not urgent at the moment. The economic uncertainties are too great, and the chemical giant faces the additional risk of possible blackouts in winter. By contrast, the opportunities at Cardiol appear to clearly outweigh the risks. The market capitalization compared to the potential and cash is tempting. At BioNTech, full cash provides security, but investors will likely need patience for sustained gains.

    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

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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