Tactical Buy Signal on Encavis AG (ECV-DE)

We had an Enter Long Strategic signal on March 22, 2022, triggered by our system on Encavis AG, ECV-DE, the German Utilities Renewable company.

Our system also triggered an Enter Long Tactical signal on May 24, 2022 that imply a likely bullish acceleration. Encavis has a rather solid track record, with a Behavioral score of 8/10, therefore the bullish signal is to be considered mainly Strategic.

Formerly Capital Stage AG, Encavis is a € 3.1 Bn market cap Germany-based producer of electricity from renewable energy sources. The Company invests in solar and wind parks, which it also operates. The Company divides its activities into four segments: Solar Parks, which is engaged in acquisition and operation of ground mounted photovoltaic (PV) parks; Wind Parks, engaged in acquisition and operation of onshore wind parks; Institutional Clients, which, through Encavis Asset Management AG, offers customized portfolios or fund solutions for investments in renewable energies, and Technical Services, responsible for technical operation and maintenance of PV parks. The Company focuses on the acquisition of finished solar and wind parks that are already connected to the power supply system. The Company operates more than 160 solar and more than 60 wind parks across Europe, in Germany, Italy, France and the United Kingdom, among others.

Management confirmed in the capital investor day the 2025 targets, and stated it would see some upside if high electricity prices persists. 1.5 GW of mid- and late-stage projects onboarded, could be realised until 2025.

For 2022, Encavis is expected to post revenue of € 390 millions coupled with a 38% Ebit margin. EPS growth should reach double digit in the next 3 years. The net debt stand at € 1.5 Bn. The dividend yield is currently at 1.6%.

Short term catalyst : High Energy prices, new solar projects.

This signal looks consistent with the European Utilities Renewable sector inmajor bullish trend, while there is 71% of Renewable Utilities companies in bullish Tactical signal and 86% in bullish strategic signal.