On Wednesday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Thyssenkrupp (ETR:TKAG) Nucera AG (NCH2:GR) shares, reducing the price target from €23.00 to €13.00, while still maintaining a Buy rating on the stock. This change comes as a reaction to the slower-than-expected progress in the regulatory environment and the company's recent retraction of its financial year 2024/25 outlook.
The analyst from Deutsche Bank cited the need for a "hard expectation reset" for Thyssenkrupp Nucera, noting that the updated market projections have led to a significant reduction in earnings forecasts.
According to the revised model, the company is now expected to only approach break-even status in the financial year 2025/26, a delay from the previously anticipated financial year 2024/25.
Furthermore, the analyst pointed out that Thyssenkrupp Nucera is now projected to generate a positive free cash flow (FCF) by the financial year 2027/28. This is a shift from the earlier assumption that the company would be close to break-even in terms of FCF by the financial year 2025/26.
The report also highlights concerns regarding the US tax credits for green hydrogen, indicating that there is a "significant risk" that these credits may only be finalized after the upcoming elections.
Additionally, the overall progress of regulators and project developers in the industry has been slower than initially expected, which has contributed to the revised outlook for Thyssenkrupp Nucera.
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