Investors may have fulminated at Serinus Energy PLC (AIM:SENX)’s trading update this morning, but equities analysts at Shore Capital Markets have offered an alternative viewpoint for what it now sees as an undervalued stock.
Jersey-based Serinus, which has operations in Tunisia and Romania, saw its revenues drop to US$8.9 million in the six months ended 30 June 2023, compared with $29.3 million during the same period in 2022.
EBITDA, gross profit and funds from operations also saw sharp declines, registering at $0.5 million, $0.8 million and $0.4 million respectively.
This resulted in shares being sent 16% lower as the new trading week got underway.
Yet this was “very much as we expected and consistent with prior updates”, said Shore Cap, continuing: “We continue to see strong potential for Serinus’s production enhancement work in Tunisia to drive meaningful increases in well deliverability in due course.”
Analysts see “deep value on offer” at Serinus’s current share price of 3.12p, though there are some caveats.
An “appropriate catalyst” will be required for Serinus’s “very considerable value to be unlocked”. In other words: “Some positive newsflow is likely required to drive a meaningful share price recovery."
As a house broker, Shore Cap analysts did not make any recommendations on the stock, though they did note that the US$23 million in net tangible assets on the balance sheet equates to around 15p per share, implying “a multiple of the current share price in its own right”.