Verbio – Horror with consequences?

At the start of trading, the Verbio share slumped by 18 percent at times, although the group has already raised its annual forecast for the second time this year. The share is currently hovering between 65 and 66 euros.

As is well known, we read between the lines in the share of the day: So how can the rapid slump be justified? One reason could be that the Federal Environment Minister recently spoke out against bio-fuel trials. Let’s jump right in and shed some light on all the background to the Verbio share. I hope you enjoy reading!

Verbio share: Price target raised before figures!

Even before the final figures for the 3rd quarter, the private bank Hauck & Aufhäuser Lampe once again looked at the Verbio share and placed a new analysis on the market. The price target was raised from 83 to 110 euros and the rating was left at “Buy”. From Tim Wunderlich’s analysis we can see that the expert expects another outstanding quarter from the biofuel producer.

According to him, the price development of the products remains strong, whereby the company has hedged against rising material prices at attractive conditions. All in all, he said, an increase in annual targets was only a matter of time. Now we can say that this time has already come:

Forecast raised, share falls by double digits!

At the start of today’s trading day, the Verbio share was still quoted at 82.45 euros per share certificate. But around 10 a.m. a new announcement reached the market. Here the group offered its annual forecast again. But contrary to an expected movement, investors took their poker chips off the table in rows, causing the share to plummet by 18 percent at times. Apparently, those already invested have taken 2 stock market proverbs to heart: “Sell on good news” as well as “Sell in May and go away”, whereby the latter is only almost true. Let us now take a look at the results:

Verbio results: This is what you should watch out for!

Confidence for the rest of the financial year apparently bounced off shareholders. For at present, speculation about a restriction of biofuel production is driving the shares down. Accordingly, a stock exchange trader recently commented and referred to the statements of the Federal Minister for the Environment, Steffi Lemke, who in an interview spoke out in favour of using less grain and vegetable oil for bio-fuel. According to this, “agrofuels from food and feed crops are not a sensible option”.

High demand!

Until the end of the financial year (June 22), Verbio had assumed earnings before interest, taxes, depreciation and amortisation (Ebitda) of 300 million euros. But now this figure is expected to be around 430 million euros. According to a press release, demand in both Europe and the USA has increased more than expected. Overall, the price environment is also favourable.

The analyst consensus under the microscope!
Now let’s take a look at all the leading analysts’ assessments of the Verbio share. Currently, the stock is covered by 4 analysts. All experts are of the opinion that investors can continue to buy the Verbio share. The assessments refer to a 12-month period and provide an initial overview of the overall sentiment surrounding the stock. The average target price for the share is 87.70 euros per share. Measured against the current price of 66.10 euros, there is a further upside potential of 32.68 percent.

Conclusion of the day!

Verbio last raised its annual targets in January. Since the outbreak of the Corona pandemic, the company has benefited from a favourable market environment. However, the statements of the Federal Minister for the Environment also give rise to a number of risks. After all, agricultural land is also limited worldwide. This is creating a regulatory fear in the market. The Ukraine conflict has once again underlined the need to secure supplies. Those who have already invested should therefore ask themselves whether the investment case has fundamentally changed.