Energean PLC 

Energean PLC (LSE: ENOG) is an FTSE 250-listed hydrocarbon exploration and production entity, with a focus on natural gas. The Company has operations in eight countries across the Mediterranean and the United Kingdom North Sea. The Company explores and invests in new ideas, concepts, and solutions to produce and develop energy with a low carbon footprint.

Investment Rationale – Sell at GBX 1,153.33

• Resistance near Current levels: ENOG’s stock price almost reached the Resistance (R2) stated in the previous report on 12 July 2023, and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Inefficient Debt Management: During FY22, the company reported a higher Debt/ Equity ratio of 4.70x, when measured against the industry median of 0.40x. Further, the % of long-term Debt to the Total Capital of ENOG was 81.0% in FY22, as compared to the industry median of 16.3%.
• Expensive Valuation: The stock of ENOG is currently offered at 2.3x on EV/ Sales based relative valuation (NTM) as compared to the industry (Energy) median of 1.3x. On EV/EBITDA-based relative valuation (NTM), the stock is valued at 3.4x which is higher than the industry median of 1.8x.
• Decline in liquidity ratios: The group’s quick ratio for FY22 was reported at 0.91x, which is lower than the industry median of 1.16x. Also, the current ratio of ENOG slipped to 1.01x during FY22 as compared to the industry median of 1.55x.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on Energean PLC (LSE: ENOG) has been given at the current market price of GBX 1,153.33 (as of 09 August 2023, 08:01 AM, GMT+1).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 09 August 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

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