Uniper [XTRA:UN01] remains an extremely interesting stock to keep tabs on: the German gas importer has been navigating stormy waters since Russia invaded Ukraine. It took a massive hit when it lost control over Unipro, its Russian subsidiary, in which it had an 83% stake.
Following the cutting of gas supplies to Europe by the Russian government, Uniper has been propped up by the German government. There have been rumours flying that it could in fact find a local Russian buyer for its Unipro operation, which includes gas and coal-fired plants in Russia.
The objective of the current management team is to make Uniper profitable again, without its lucrative Russian contracts and its cosy relationship with Gazprom.
Getting past Ukraine: can it be done?
The impact of the war in Ukraine has been considerable for Uniper shareholders. Going into 2022 Uniper had been benefiting from high gas prices, but the invasion precipitated a huge drop in share price value from over EUR 42 to hit EUR 2.59 by the beginning of this year (stock trading at EUR 5.20 at time of writing).
Investors are obviously hopeful that this could be the undervalued energy trade of the year, as the company is clearly too important to the German government to be allowed to go under, and has an important future role to play in European energy markets.
Running an AI-driven screen of the stock has to be done with some caution, as there are a lot of political factors involved here. Machine learning will tend to lean 0n the data filed by the company plus share price performance and technical analysis how this in turn stacks up with close peers in the market.
Overall news sentiment has been relatively neutral on Uniper recently, although a recent bright spot was the announcement of the sale of Uniper Energy DMCC to Montfort Group and The Private Office – Dubai.
Uniper is not in as bad shape as you might think
The real star in the fundamentals report are the assets, rated an 84/100 by our data partners BridgeWise. The company is considered to be performing reasonably well and on a par with its peers in the market. Our screens show there are a couple of German energy market performers with some excellent fundamentals, superior to those of Uniper, which we will look at more closely in future articles on our AT+ premium subscriber channel.
Uniper’s income statement looks excellent, however, rating 99/100 and beating the peers average index. It also performs well on cash flow. Bear in mind that many central European listed energy companies have been struggling recently, with the war in Ukraine eating into balance sheets.
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“Overall, Uniper SE’s critical balance sheet metrics appear to signal strong support and a high likelihood of positive growth going forward,” BridgeWise said in its recently analysis of the stock. “Its impressive cash and cash equivalents metrics should support upward pressure on its stock price.”
Just on its own, Uniper’s income statement, when measured against peers, makes us think that this stock is looking over-sold and the victim of plenty of negative news on the geopolitical front. The rumour mill is forever turning in Frankfurt and we anticipate some more volatility in the stock if the last week or so is anything to go by.
Overall, BridgeWise rated Uniper SE as a Hold with an overall score of 76%, but Uniper does have a sector-beating income rating which could see some of the other metrics close up on this in the course of the next six months. We’d be looking to buy this ourselves, if it wasn’t for the fact that there are a couple of other German listed energy stocks which look even more interesting on our radar.
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