Liberum has lifted its price target for Ceres Power PLC (LON:CWR) significantly, dubbing the shares “compelling value” at current prices.
It has moved its marker to 720p (up from 540p), while acknowledging the stock has almost doubled in price in the last 12 months.
However, the broker points out that on this basis Ceres has actually underperformed its comparator group, which is up three-fold in that timescale.
“In our view, this has little to do with growth and profitability prospects and is primarily due to technical headwinds – profit taking by some longstanding holders – and the fact it has a smaller retail following than UK new energy peers,” Liberum said in a 70-page note to clients entitled ‘Still a Hot Prospect’.
“In fact, commercial progress over the last year has been extremely encouraging and our valuation analysis points to the significant upside on both a relative and absolute basis.”
Founded by researchers from Imperial College London, Ceres has developed third-generation solid oxide fuel cell technology that retains the generic benefits of previous iterations (such as fuel flexibility and high electrical efficiency) but operates at lower temperatures.
The company has licence deals with technology and engineering leaders Bosch, Weichai, Doosan and Miura.
The shares were flat at 547p, valuing the business at £940mln.