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SIMEC Atlantis Energy is a ‘buy’ says Investec

SIMEC Atlantis is “a triple play on sustainability” according to Investec, which sets a 'buy' recommendation and a 75p price target.

SIMEC Atlantis Energy - SIMEC Atlantis Energy is a ‘buy’ says Investec
Image source: @simecatlantis, Twitter

SIMEC Atlantis Energy Ltd (LON:SAE) shares are tipped to treble in value as the renewable energy pioneer continues to advance key projects.

Investec has initiated its coverage with a ‘buy’ recommendation which comes with a 75p price target, compared to a prevailing market price of 26.25p.

Analyst Martin Young described SIMEC Atlantis as “a triple play on sustainability” monetising end-of-life waste, tidal stream power, and small-scale hydro.

READ: SIMEC Atlantis inks financing deal for Uskmouth

Already a world leader in tidal stream power, thanks to the MeyGen Phase 1 project in Scotland, the Investec analyst pointed to the Uskmouth coal plant conversion project as another potential “game-changer”.

Securing planning permission and reaching financial close on the Uskmouth are seen as catalysts by Investec. The project can provide value accretion and would put SIMEC Atlantis on a road to profitability by 2023.

Young reckons the Uskmouth project could be granted planning permission in December, leading to financial close in the second quarter of 2021.

Significantly, Investec’s lofty 75p price target excludes MeyGen Phase 2 as it remains contingent upon important agreements – a CfD in the Allocation Round 4 and/or corporate ‘private wire’ power purchase agreement (PPA).

Investec does include incremental MeyGen value in its ‘upside’ valuation which is pitched at 112p per share.

Quick facts: SIMEC Atlantis Energy

Price: 19.38 GBX

AIM:SAE
Market: AIM
Market Cap: £95.27 m
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SIMEC Atlantis Energy seals deal to finance 100% of Uskmouth Phase 1 project

SIMEC Atlantis Energy Limited's (LON:SAE) Tim Cornelius explain's to Proactive what the debt financing deal with South Korean financial institution Hana Financial Investment means for the Uskmouth Phase 1 project. Cornelius says the debt facility will provide the company with up to £170mln and...

on 24/8/20

2 min read