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(Sharecast News) - Analysts at Berenberg initiated coverage on exploration and production firm Jadestone Energy with a 'buy' rating and 68p target price on Thursday, stating the stock was "a jewel in the making".
Berenberg said Jadestone Energy stands out as one of the cheapest companies in its E&P coverage, trading at "a significant discount" to the value of its currently producing assets.
The German bank said Jadestone's production guidance for 2025 implies over 70% growth in output since 2022, and it forecasts further 20% growth by 2027. Importantly, Berenberg said, the production growth generates cost efficiencies, and it also expects to see underlying earnings growth and margin expansion over the medium term.
"In our view, this provides a strong platform as the company looks to continue exploiting organic growth opportunities in the portfolio, as well as pursuing accretive inorganic growth in the Asia-Pacific region," said Berenberg.
Berenberg added that its target price was derived from its net asset value-based methodology, as well as target multiples of 4.0x 2027E enterprise value/EBITDA and 3.5x 2027E enterprise value/debt-adjusted cash flow.
Reporting by Iain Gilbert at Sharecast.com
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