First Berlin Upgrades SFC Energy's Target Amid Ukraine Deal

First Berlin Equity Research has released an update on SFC Energy AG, affirming a buy recommendation and raising the target price from €22 to €31. This optimism stems from a significant defense order from Ukraine, financed by the German government, valued at €43 million. Analysts view this as the start of a lasting business relationship with Ukraine, impacting SFC's defense segment. The raised guidance for 2026 reflects a 77% increase above prior estimates, highlighting defense as a high-margin sector. Despite lower Q1 revenues from capacity allocation for the Ukraine project, improved profitability was noted.

The company posted an adjusted EBITDA margin of 18.0% in Q1, compared to 16.4% same period last year. First Berlin has subsequently revised forecasts for 2026 and beyond, factoring in SFC's enhanced prospects in the defense industry. A new DCF model supports the updated target price, suggesting a 50% upside potential. The substantial defense order is expected to leverage operational efficiencies, contributing to the company's financial health.