Ence soars on Continuous Market following its results; 18.75% potential

Ence shares led the broader market Tuesday morning after the company reported results at the close yesterday. Jefferies analysts upgrade their recommendation to “buy” with an upside potential of 18.75%.

ENCE is the main protagonist of the continuous market on Tuesday morning, rising 6.12% to €3.40 after rising more than 7.6% in the early morning.

The company announced yesterday after markets closed that made a profit of 9.5 million euros in the first quarter of the year, thanks to rising prices for cellulose and an increase in the volume of renewable generation. However, earnings represent a decline of 53.6% from the 20.5 million in forecast results for the same period in 2023, which include the accounting effect of updating the remuneration parameters applicable to the plants of the group’s renewable energy plan approved V. June of the previous year, retroactive to January 1 of the previous year.

The paper and energy company’s consolidated operating result (EBITDA) for the period from January to March reached 45 million euros, an increase of 78%.

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The group’s net financial debt at the end of March was €323 million, representing leverage of 1.8 times average Ebitda for the cycle (2015-2023), with a cash balance on the balance sheet of €252 million.

Jeffries Analysts applauded these reports, improving their recommendations, which range from “support” to “buy‘, which is also accompanied by an increase in the target price. The new valuation is €3.80 per share, up from the previous €3.33, representing an upside of 18.75% from yesterday’s Monday close.

ENCE shares have been overvalued by 10% this year, pushing its market capitalization to almost €840 million.