UBS has expressed a cautious stance on Uniper, maintaining its sell rating and lowering its price target from €36 to €35, as the financial services provider expressed concerns about the company’s long-term earnings growth potential and strategic clarity, especially in light of his obligations. to return excess equity to the German government.
Uniper’s strong financial forecast for the year 2024, which includes expected EBITDA of €1.9-2.4 billion and adjusted net income of €1.1-1.5 billion, is overshadowed by an increased provision for reimbursement to the state.
The provision increased by €0.6 billion to a total of €2.9 billion, offsetting the positive impact of the improved profit outlook. In addition, an upcoming property tax increase in Sweden from 2025, estimated to cost around €25 million, contributed to UBS’ decision to lower Uniper’s price target.
UBS also pointed to the lack of regulatory clarity around Uniper’s plans for green gas investments. Although the company committed €400 million to new projects in the first half of the year, including a significant pumped storage facility in Germany, uncertainty remains over the specifics of the auctions for hydrogen-ready combined cycle gas turbines (CCGTs) in Germany .
In terms of valuation, UBS based its sales assessment and price target on a sum-of-the-parts (SOTP) analysis with divisional discounted cash flows (DCF) tested at relevant multiples.
UBS noted that Uniper’s shares trade at a 2026 estimated price-to-earnings (PE) ratio of 21.1 times, which is significantly higher than the industry average of 13.2 times. The company remains bearish on Uniper, citing stagnant earnings prospects until 2030 and the impact of ongoing asset sales and government stake sales as factors limiting investment attractiveness.
This article was produced with the support of AI and reviewed by an editor. For more information see our General Terms and Conditions.
