Uniper: Big Opportunity or High Risk?

Last Updated: 12. Dezember 2023By

One of the most remarkable stocks these days is the energy trader Uniper. A state-owned company, after the crisis in 2022 took the company into its grip. Uniper was unable to operate the business profitably at the highest gas prices, the state stepped in as a capital provider and owner. Now everything will be different – and the chances and risks are on the table for you.

What kind of share price jumps with Uniper? The share alone on Monday stood out on the stock exchange charts with a jump of more than 12%. Today, on Tuesday, it is -5%. All this without decisive news for this particular day. What is going on, the question of readers.

A few days ago at an extraordinary general meeting, Uniper approved a capital measure. It will lead to a capital reduction, which in turn will affect the entire balance sheet structure and the value of the shares. The purpose of the measure is to enable the state to exit from its participation at least partially in the medium term, albeit over the years.

So how should investors handle the company? The year 2022 was particularly bad because the company simply found an exceptional situation in the market. Conversely, the current year cannot be evaluated by normal standards. On the basis of very low gas prices, Uniper is making profits which will be seen as unnatural. So the share cannot be valued so easily.

If the benchmark is missing: caution! The pure figures are initially quite interesting. The net profit for the current year is expected to pour more than 4 billion euros into the company’s coffers. That would be encouraging. However, the profit will decrease significantly next year. If the estimates are correct, the current expected P/E ratio would be around 8.2. The P/E ratio in the coming year would be around 27.

One value is cheap, the other is quite expensive. How can you orient yourself? My answer in such cases is: not at all. The estimates are relatively arbitrary. Much depends on the gas prices, which in turn can only be calculated with difficulty.

The analysts are also suspicious. On average, the value has a price target (relative to the target) of -45% among analysts. This does not have to be the absolute truth, but it shows that the market is skeptical. In my opinion, you should orient yourself to this – even if share price jumps of 12% in one day should be tempting. There are more solid energy companies.

Uniper: -45% possible! – WKN: UNSE01 – ISIN: DE000UNSE018

Source: https://fundamental.aktienscreener.com/DE0008232125/EI/deutsche-lufthansa-ag/data