Mailed from / found at: Erste Group Research
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From Erste Group’s Equity Weekly: In our new Company Report, we significantly reduced our estimates for SBO as a result of the corona pandemic and the associated significant cuts in exploration and production spending in the oil and gas sector. As a result, our price target drops to EUR 29 / share (before the Corona crisis: EUR 60.5) and we downgrade our recommendation to keep from accumulating.
Outlook. The outlook for 2020 remains difficult. In 2020 we now expect sales of EUR 300.2 million (-33% y / y) and a net loss of EUR 6.8 million (vs. net profit of EUR 32.3 million in 2019). We believe that SBO is well prepared for the coming adversity. The experienced management and the strong balance sheet, with liquid funds of EUR 247.5 million at the end of March 2020, speak for the company. Nevertheless, the way out of the corona crisis and the sustainable recovery of the oil industry and the SBO results (and thus the SBO share) is a longer one. SBO’s share price remains volatile, closely linked to the oil price. Short-term trading opportunities could arise.
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