finnCap Research Company Notes - 20 November 2018

Nov 20, 2018 / News

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Sector: Energy

Europa Oil & Gas (EOG): Moving into the drilling phase

Key data                              

  • Share price (p)                  3.6
  • Target price (p)                41.0
  • Market cap (£m)                              16.9
  • Enterprise value (£m)                    10.4

Europa is raising up to £5m in a placing and open offer to help it move to the next phase of its development – the drilling phase, where it will look to crystallise the latent value within its massive Irish exploration portfolio. Datarooms are open as it seeks partners to fund drilling across four blocks. Offers have already been received for three of these – LO 16/20 in the Slyne basin, and FEL 1/17 and FEL 3/13 in the Southern Porcupine basin. This should provide funding for a well on each, starting with the flagship Inishkea prospect as soon as 2020. Evidence from across the sector suggests that a successful conclusion to the farm-outs will be a major catalyst for share price performance.

Jonathan Wright |

Sector: Industrials

Solid State (SOLI): Interim results – a stronger H2 in prospect

Key data                              

  • Share price (p)                  316.0
  • Target price (p)                400.0
  • Market cap (£m)                              26.6
  • Enterprise value (£m)                    24.8

Half-year results were in line with the upbeat period-end update, which pointed to trading ahead of expectations, when we upgraded our forecasts. Following the recent Pacer acquisition, we also upgraded forecasts. We therefore maintain current forecasts, looking for a stronger H2 from both underlying trading as well as boosted by Pacer’s contribution. Both Manufacturing and Distribution have traded well in H1 and have a good order book and momentum for H2. The shares are starting to recover from deeply oversold levels and still offer upside to our maintained 400p price target.

David Buxton |

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