Nabaltec AG: Positive Outlook and Conservative Guidance

Nabaltec AG, identified by ISIN DE000A0KPPR7, has been classified by NuWays AG with a "Buy" recommendation as of June 27, 2024. Despite a 30% increase in share price since March, Nabaltec remains attractive due to operational improvements, promising prospects for boehmite, and an undervaluation with shares trading below book value.

In Q1, Nabaltec reported €54 million in sales and a 9% EBIT margin. The company is expected to show further gains in Q2 with €55 million in sales and a 9.1% EBIT margin. The full-year guidance remains conservative, projecting slight sales growth and an EBIT margin of 7-9%, despite strong H1 performance.

Demand for boehmite, essential for EV battery production, has been weak but is expected to rebound by 2025. Meanwhile, environmental flame retardants, constituting 63% of group sales, drive growth thanks to increased data centre investments.

Valuation-wise, Nabaltec's €16.2 share price is below its book value of €16.70. Historically, the company has traded at around 2x P/BV. With a 10% free cash flow yield for FY24 and a robust balance sheet, the outlook remains positive. The €25 target price is reaffirmed based on FCFY 2025e.