French energy group Engie SA’s (FR:ENGI) stock yesterday received a new Buy rating from a Credit Suisse analyst, predicting over 100% growth. Overall, the stock has a Strong Buy rating from analysts. The stock has garnered favorable ratings, mainly after the company raised its full-year numbers for recurring net income and operating profit for 2023. Analysts believe the company is heading towards a robust fiscal year.
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Over the past six months, the stock has experienced a 21% uptrend, attributed to improved company earnings driven by higher power prices in Europe.
Engie is a French utility company that operates throughout the complete energy value chain, including electricity, natural gas, and renewables, etc.
Analysts Opinion
Yesterday, analyst Wanda Serwinowska from Credit Suisse initiated her coverage of the stock with a Buy rating. She has set a price target of €175.5, implying a huge upside potential of 118.58% from its current trading level.
11 days ago, Kepler Capital analyst Juan Rodriguez also confirmed his Buy rating on the stock, predicting a growth rate of 45.8% in the share price.
The Bullish Case
Last month, the company raised its guidance for 2023 on the back of its performance in its energy unit. For the full year, the company has revised its projection for net recurring income to be between €4.7 and 5.3 billion, which is an upward adjustment from the earlier forecast of €3.4 to 4.0 billion.
Engie has also indicated its new anticipation for operating profit (EBIT), excluding its nuclear operations, to be within the range of €8.5 to 9.5 billion, surpassing the previous guidance of €6.6 to 7.6 billion.
The company also stands to gain significant growth potential from its recently renewed ten-year nuclear contract. The contract with the Belgian government to extend the use of the country’s nuclear reactors by 10 years provides a long-term opportunity for Engie. Under the agreement, the company will incur a one-time charge of €4.5 billion that relieves the company of any forthcoming expenses and reduces the execution risk.
Is ENGIE Stock a Good Buy?
According to TipRanks, ENGI stock has a Strong Buy rating based on six Buy and one Hold recommendations from analysts. The average price target of €40.14 offers a solid growth potential of 178.3% in the share price.
