Research Tree | Equity Research for Investors

19 Oct 21

AFC Energy (AFC LN) - Attractive ahead of COP26

The forthcoming UN Climate Change Conference (known as COP26) should result in an acceleration of governments’ actions to reduce CO2 emissions. This will result in an acceleration of customer end-user adoption rates which would be positive for AFC Energy which is developing zero-emission solutions for the EV-charging, construction, data centre and marine markets.

Companies: AFC Energy plc

22 Oct 21

LIBERUM: Bango* - Strategy day spotlights massive growth outlook

Companies: Bango plc

20 Oct 21

LIBERUM: SigmaRoc* - On track and good Nordkalk meeting

Companies: SigmaRoc Plc

20 Oct 21

Phoenix Copper (PXC) - Update on Red Star magnetic survey

Phoenix copper today provides an update on its ground geophysical survey over the Red Star prospect near its Empire copper project in Idaho. The Red Star skarn mineralisation (lead and silver ± copper, zinc) is associated with magnetite; the survey just undertaken was to better understand the distribution and orientation of magnetite to find potential mineralisation and to inform the location and direction of a further drilling programme.

Companies: Phoenix Copper Ltd. (United Kingdom)

19 Oct 21

Vast Resources+ (VAST, House Stock at 5.4p)

We are initiating coverage of VAST Resources (VAST), which has wholly-owned Baita Plai and Manaila polymetallic mines plus an interest in two exploration projects, all located in Romania. At this stage, Baita Plai is the main driver for our valuation as it is currently being ramped up to 14kt per month. As such, we expect Baita Plai’s Cu eq output to reach c 2.4ktpa in FY23F followed by 3.3ktpa in FY24F. This, coupled with Manaila’s potential re-start of an additional 3ktpa of Cu eq over the sho

Companies: Vast Resources plc

20 Oct 21

Active Net Zero Clean Energy Index

Longspur Research and Radnor Capital Partners have launched the Active Net Zero Clean Energy Index to allow investors to measure the performance of companies actively enabling climate solutions.The key emphasis is on the word “active”. This pan-European index eliminates greenwashing by penalising fossil fuel activities and focuses on actual achievement and positive contribution, rather than promises for the future. Our proprietary selection methodology is systematic, rules based and quantifiable

Companies: DRX ITM PHE SAE SIT STRLNG VLS

21 Oct 21

Frontier Developments - Great Expectations

The market (and FDEV) is projecting an ambitious step-change in financial performance in FY 22 and FY23. Investors however may recall that Elite Odyssey updates have been delayed. For a variety of reasons, we believe there is some residual risk of disappointment here. Hence, we prefer to sit on the side-lines. Buy

Companies: Frontier Developments Plc

21 Oct 21

LIBERUM: Luceco* - Q3 trading in line

Companies: Luceco PLC

19 Oct 21

Tremor - Tremor’s end-to-end platform strengthens with CTV acquisition

Tremor has announced the complementary $14.7m acquisition of Spearad, which is a global Connected TV (CTV) ad server and media management platform. It enables broadcasters and TV content companies to deliver seamless TV-like ad experiences in CTV and OTT environments, through a platform that can centrally manage and optimise both direct-sold and programmatic CTV campaigns. The Spearad platform will be integrated into Unruly’s Supply Side Platform (SSP), and enable Tremor to offer new and existin

Companies: Tremor International Ltd.

18 Oct 21

Cenkos: Diversified Energy Company Plc -- The Consolidator of Choice

Diversified Energy Company (DEC) has announced a fourth acquisition within the Company's Central Region, acquiring a portfolio of upstream assets and related infrastructure from Tapstone Energy Holdings LLC and its related party, KL CHK SPV LLC. Oaktree Capital will co-invest in the acquisition, representing Oaktree's third co-investment since May this year. Importantly, Oaktree's participation provides important third-party validation whilst also affording Diversified additional liquidity and l

Companies: Diversified Energy Company PLC

19 Oct 21

Palace Capital* - Encouraging Trading Update

Palace Capital has released a good trading update of for the 6 months to 30 September. The Group has achieved good progress both across the portfolio and in sales achieved at Hudson Quarter. With cash reserves rising, the Group continues to look for value creative opportunities to recycle capital which should realise value for shareholders. Buy

Companies: Palace Capital plc

18 Oct 21

Bioventix - FY 2021 – normality returning

Bioventix reported FY 2021 results that showed an improvement in H2 revenue growth (+11% vs +1% in H1), suggestive of a return to pre-pandemic testing volumes and growth, resulting in FY 2021 revenues +6% to £10.9m. Adjusted pre-tax profit, however, fell 3% to £8.1m, impacted by c.£0.5m (-6%) FX movements. A 38p special dividend was proposed, resulting in a full-year dividend of 143p, up 1%. FY 2022 will be a transition year, impacted to some extent by FX headwinds (c.-5%) and the loss of c.£1.2

Companies: Bioventix Plc

20 Oct 21

UK Net Zero Strategy Helpful

We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T

Companies: ADN DRX GSF ITM NESF PHE SAE SIT STRLNG TLG VLS

21 Oct 21

Team17 - Differentiated Growth Story

The company has not put a foot wrong since IPO. We believe that TM17 has a differentiated business model, which combines premium independent gaming and Edutainment. The company is the partner of choice for independent developers; however, this strategy results in low-ish gross margins. TM17 is perhaps the most cautious of the UK stocks, in terms of near-term outlook. Buy

Companies: Team17 Group PLC

21 Oct 21

Ongoing record revenue generation and benign cost of risk

The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.

Companies: Barclays PLC

23 Oct 21

Strong Q3 prompts guidance upgrade

Ipsen reported a healthy set of Q3 sales numbers. The limited impact of generics coupled with strong uptake/recovery across all segments resulted in a FY21 guidance upgrade. Moreover, recent collaborations should result in the targeting of additional newer growth avenues. Overall, with the new strategy in place, it seems that this French small pharma is on course to regain its lost glory.

Companies: Ipsen (IPN:EPA)Ipsen SA (IPN:PAR)

23 Oct 21

9M 21: persistent growth momentum demonstrated

Sika published a good set of 9m results with sales up by 18.1% in local currencies and 18.2% in CHF. The America region, China and India continue to show strong demand momentum but the same cannot be said for the EMEA region. The Global segment too is suffering from the semiconductor shortage but Sika was able to manage its top-line figures via frequent price increases and the EBIT by better cost management.

Companies: Sika AG

22 Oct 21

Stable Q3 21 vacancy in French Offices but is Samsung a harbinger of worse to come?

Take-up was up in European Offices in Q3 21, however vacancy was stable sequentially and lfl growth was negative, especially in France (-4%). Residential Germany was the key driver of the consolidated 0% lfl

Companies: Covivio SA

22 Oct 21

Costco Wholesale Corporation - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 10/22

Costco has been on a roll as the company had an outstanding month of September with net sales of $19.5 billion for the 5-week period ended October 3, 2021, up 15.8% year over year. The company saw a staggering 14.3% rise in comparable sales with increased consumer traffic as the average American has become far more comfortable shopping in-store today. This comes after a strong fourth quarter of fiscal 2021 where Costco reported an increase in net sales of 17.5% to $61.44 billion. The management

Companies: COSTCO WHOLESALE (COST:NYSE)Costco Wholesale Corporation (COST:NAS)

22 Oct 21

Procter & Gamble Co - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 10/22

Consumer goods as a sector is hurting from lower margins as a result of the rising cost inflation and Procter & Gamble is no exception to this rule. The behemoth delivered a decent result with revenues surpassing expectations but its operating margin and earnings were lower than last year on account of inflationary pressures on all costs ranging from warehouse space to raw materials. P&G’s positive revenue performance was a function of strength across all segments coupled with robust volume, pri

Companies: Procter & Gamble Co (PG:NYSE)Procter & Gamble Company (PG:NYS)

22 Oct 21

Verizon Communications Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 22/10

Verizon delivered a mixed quarterly result with revenues missing expectations but managed to deliver an earnings beat. The company’s top-line continues to be driven by a strong performance in its consumer business which grew by 7.3% as a result of healthy wireless service growth and a robust performance within the fiber optic service unit. It offers a variety of Mix and Match pricing in both wireless and home broadband plans for consumers. With most of its retail stores being fully operational a

Companies: Verizon Communications (VZ:NYSE)Verizon Communications Inc. (VZ:NYS)

22 Oct 21

Netflix Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 22/10

Netflix surged past the target price from our last report as the company reported an exceptionally good result with strong subscriber growth and earnings. The company added as many as 4.38 million subscribers in the quarter, well above the 2.2 million in the corresponding quarter of the previous year on account of the huge success of many of its originals such as Squid Game, Lupin and Money Heist’s latest season. Its 213.56 million paid subscribers across the globe have grown by 9.4% year over y

Companies: NETFLIX (NFLX:NYSE)Netflix, Inc. (NFLX:NAS)

22 Oct 21

EQS Group - Grasping the whistleblowing opportunity

EQS has built a strong platform business in corporate compliance and investor relations, with growing recurring revenues. It is well positioned to capitalise on the time-limited expansion opportunity presented by the European Whistleblowing Directive, which has an implementation deadline of December 2021. Achieving a strong foothold here will be key for driving greater SaaS customer acquisition, underpinning management’s ambitious medium-term revenue and margin guidance.

Companies: EQS Group AG

22 Oct 21

JPMorgan Global Growth & Income - Merger with SCIN will double size and cut charge

The board of JPMorgan Global Growth & Income (JGGI) has announced that it has signed heads of terms with the board of Scottish Investment Trust (SCIN) in respect of a proposed combination. Following the transaction, JGGI’s assets would total at least £1.2bn. This announcement follows a review of SCIN’s investment management arrangements undertaken by its board after a period of underperformance, which was due at least in part to its contrarian and value bias. SCIN’s board selected JGGI because o

Companies: JPMorgan Global Growth & Income PLC GBP

22 Oct 21

Solid State - Trading on track with potential H2 upside

Solid State’s post-close trading update states that it expects to announce strong year-on-year growth in both revenues (18%) and adjusted profit before tax (27%) for its first half to 30 September 2021. While management sees potential for upside during H2, dependent on successful navigation of supply chain challenges, and is confident that the group will meet the FY22 consensus adjusted profit before tax estimate, the consensus estimates remain unchanged at present.

Companies: Solid State plc

22 Oct 21

Cellular Goods - Commercial launch imminent

Cellular Goods was established in 2018 with the aim of developing premium, research-backed, consumer products, based on biosynthetic cannabinoids. These include skincare products, the first to be formulated with CBG (a rare cannabinoid supplied by Willow Biosciences) following positive studies. Additional partnerships have been formed with leading biosynthetic cannabinoid manufacturers in the United States and Canada. The intention is to launch the first two products under the Cellular Goods bra

Companies: Cellular Goods Plc

22 Oct 21

9M 21: TAV-led revenue growth

ADP has released better-than-expected 9m revenue figures, mainly owing to higher revenues from the international business. Traffic at Paris airports is in line with our current assumptions but we will upgrade our revenue estimates for the international business. The impact on the target price will however be overshadowed by a downward revision to our margin expectations.

Companies: Aeroports de Paris (ADP:EPA)Aeroports de Paris SA (ADP:PAR)

22 Oct 21

Well-balanced growth

L’Oréal published a consensus-beating set of Q3 21 figures. All business divisions experienced qualitative growth, benefiting from the group’s faster digital adoption and innovative omnichannel distribution. Despite the resurgence of Covid-19 having affected the trading performance in several areas in Asia (i.e. Hainan), the group maintained double-digit growth in most of its major markets. With a well-balanced business portfolio and geographical presence, the group is on the new acceleration

Companies: L'Oreal (OR:EPA)L'Oreal SA (OR:PAR)

22 Oct 21

Sell-off creates a buy opportunity for this compelling value proposition

Rexel’s share price slumped >9% yesterday after the Q3 sales came in slightly short of market expectations. The sales momentum moderated in Q3 vs Q2, as a result of a relatively tougher base effect and some impact from supply chain constraints. While the Q3 update was underwhelming, we view yesterday’s stock price movement as a market overreaction. Although we will be trimming our estimates post the Q3 results, we remain optimistic on Rexel on the back of structural growth drivers and the cheap

Companies: Rexel (RXL:EPA)Rexel SA (RXL:PAR)

22 Oct 21

Q3 chip hit worse than expected but confirmed FY guidance reassures

Renault’s Q3 results showed the extent of the production disruption caused by the semiconductor crisis, which has proved more severe than anticipated. Despite the dire scenario, there were still silver linings, with RNO continuing to fulfil its cost savings plan, to be completed 1 year ahead of schedule, as well as positive developments in mix and pricing. The reiteration of the FY operating margin guidance should bring some reassurance to investors heading into a still chip-constrained 2022.

Companies: Renault (RNO:EPA)Renault SA (RNO:PAR)