Scatec (OB:SCATC): Assessing Valuation After New African Solar Projects Start Commercial Operations

Scatec (OB:SCATC) has just switched on two new African solar assets: the second phase of its Mmadinare Solar Cluster in Botswana and the 273 MW Grootfontein plant in South Africa, locking in long term contracted cash flows.

See our latest analysis for Scatec.

These new PPAs come after a string of growth moves across Africa, and even though the 1 day share price return of 1.69% barely shifts the needle, Scatec’s strong year to date share price return of 25.93% alongside a 30.85% 1 year total shareholder return suggests positive momentum is gradually rebuilding after a difficult five year stretch.

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With revenue and earnings growing fast and the share price still trading around 19% below analyst targets, is Scatec quietly undervalued after years of pain, or is the market already pricing in a sunnier growth trajectory?

Most Popular Narrative: 15.8% Undervalued

With the narrative fair value sitting above Scatec’s last close of NOK 102, the story leans toward upside potential driven by ambitious growth assumptions.

The analysts have a consensus price target of NOK116.0 for Scatec based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK135.0, and the most bearish reporting a price target of just NOK105.0.

Read the complete narrative.

Curious how Scatec gets from today’s earnings power to that richer future multiple and cash flow profile? The narrative hinges on aggressive growth and margin shifts. Investors may want to understand the specific profit roadmap behind that valuation change.

Result: Fair Value of $121.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside case still faces execution and regulatory risks, as project delays, policy shifts or supply disruptions could quickly challenge those optimistic growth assumptions.

Find out about the key risks to this Scatec narrative.

Build Your Own Scatec Narrative

If you see the numbers differently or want to stress test your own thesis using the same data set, you can build a personalised view in just a few minutes: Do it your way.

A great starting point for your Scatec research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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