Performing Well, This Is A Securities Prediction Over PGEO Shares

The initial list of shares of PT Pertamina Geothermal Energy Tbk (PGE) at Main Hall IDX, Jakarta. (Photo: Doc. ANTARA)

JAKARTA - The share price of PT Pertamina Geothermal Energy Tbk (PGEO) is predicted to continue to soar.

This was revealed by Research Analyst MNC Sekuritas Alif Ihsanario who gave a buy rating to PGEO with a price target of IDR 1,830 per share.

"This rating is given by considering PGEO's stable growth, its strategic projects, and strong government support for the development of renewable energy," said Alif in his statement to the media, Friday, November 24.

The analysis of MNC Sekuritas is based on the results of an in-depth investigation of the stock progressivity and business performance of PGEO.

In an analysis announced on November 17, 2023, Alif stated that the predicted share price could reach IDR 1,830 per share, a reflection of the potential increase of 46.4 percent of the current price, as well as a price to book value (PBV) 3.3 times.

Meanwhile, in the trading session held on Tuesday, PGEO's price was opened with a value of Rp1,255 and had strengthened to 10 points.

"This analysis is also based on a report in the third quarter of 2023, where PGEO recorded a remarkable performance with an increase in operating income from USD 287.4 million to USD 308.9 million year on year," he explained.

Alif revealed that another reason that predicts PGEO's share price will skyrocket is the projected revenue of the company.

"The growth will be significant with a compound annual growth rate (CAGR) of 11.5 percent during the period 2022 to 2028," he said.

Then, supporting reasons in terms of operations, Alif said, PGEO has a stable performance and a solid track record.

He said this was evidenced by the PGEO average capacity factor which was above 80 percent.

"This figure exceeds the average geothermal industry in the United States, which is 69 percent," he said.

Alif also said that domestically, PGEO has a number of ambitious expansion plans marked by a target of increasing capacity by 340 MW in the next two years.

"In addition, cooperation with Chevron in the construction of Way Ratai is also a strategic project that has a big impact on geothermal growth in Indonesia," he said.

Furthermore, the MNC Sekuritas report assesses that the expansion abroad carried out by PGEO, especially Kenya, shows the company's commitment to geographical diversification.

Another fundamental thing that is no less important, according to the MNC Sekuritas report, is that PGEO has a strong financial profile.

In the last five years, PGEO's interest coverage ratio (ICR) has averaged 10.6 times or 243 percent higher than the average similar industry of 3.1 times.

"This figure shows PGEO is good enough to pay its loan interest, implying that PGEO has managed its finances well," said Alif.

MNC Sekuritas assesses that if you look at the prospects for the geothermal industry, Indonesia occupies the leading position in global geothermal capacity.

Alif said, this shows the potential for significant growth for this industry in the future.

"Government support for renewable energy and EBT infrastructure development policies can provide significant impetus to companies like PGEO," he said.