Berenberg stays bullish on Ceres Power despite Bosch 'setback'

(Sharecast News) - Shares in Ceres Power have plummeted over the past week after Bosch ended a partnership with the firm and intends to sell its stake, though Berenberg said it still sees significant value to the stock despite the "setback". Bosch announced on 20 February that it will discontinue its operations relating to the industrialisation and preparation for production of decentralised power-supply systems based on solid oxide fuel cells, thus ending its partnership with Ceres.

As a result, the company also decided to divest its 17.44% shareholding in the company.

Berenberg has slashed its target price for Ceres from 650p to just 340p, but that still represents huge upside from Tuesday afternoon's price of 70.95p, with the shares having nearly halved since the news.

"While this was clearly a disappointing update for Ceres and it may take time to restore market confidence, we note that in the near term this has limited impact on our financial forecasts and, importantly, over the last 12-18 months, the company has signed partnerships with other global manufacturing partners that will help scale the technology over the long term," the broker said.

Nevertheless, looking further out, Berenberg has still cut its 2025-2030 revenue forecasts by a cumulative £150m or 25%.

"Overall, while the loss of Bosch is clearly frustrating, we remain confident in the ability of Ceres's partners to scale-up the technology and generate significant long-term, high-margin royalty revenue," the broker said, keeping a 'buy' rating on the stock.