First Berlin Equity Research Raises Target Price for Deutsche Rohstoff AG Amid Strong Production

Deutsche Rohstoff AG has received a positive assessment from First Berlin Equity Research, with the firm reiterating a 'Buy' recommendation and raising the target price from €46.00 to €54.00. This update, provided by analyst Simon Scholes, follows DRAG's adjustment of its revenue and EBITDA guidance for 2024 upwards, now anticipating revenues between €210 million and €230 million, and EBITDA between €160 million and €180 million, driven by robust production volumes and an expanded drilling program.

The substantial upgrade is underpinned by stable, high output levels from new wells initiated at the end of 2023, with a noted 14% production overachievement in Q1 2024 compared to the budget. DRAG also plans to enhance its drilling schedule by adding 6 to 7 new wells, based on higher than expected cashflows this year. Despite these advancements, the forecast for 2024 keeps the oil price assumption unchanged at USD75 per barrel, while the gas price expectation has been adjusted downwards from USD3/MMBtu to USD2/MMBtu.