Lukoil PJSC

  • TickerLKOD
  • ISINUS69343P1057
  • ExchangeLondon Stock Exchange
  • SectorOil & Gas Producers
  • CountryRussia

Raiffeisen Centrobank Equity Daily 27.07.2020

 AT: Kapsch TrafficCom - Loss of contracts, US cost overruns and software issues drive 1Q preliminaries deep into the red (negative)  AT: Wienerberger - Good 2Q performance, company lifts lower end of FY 20 l-f-l EBITDA guidance and now eyes EUR 460-480 mn (positive)  CZ: CEZ - Bulgarian court cancelled ban on CEZ selling local assets to Eurohold (positive)  PL: Lotos - 2Q 20 preliminary clean earnings in the black, but reported earnings heavily impacted by PLN 0.8 bn one-offs (negative)  RO: Digi Communications - Competition Council approved takeover of RGUs from its competitor AKTA (neu...

Research Team

The Rear-View Mirror – EME markets: Equity returns mixed as rebound forces weaken

EME Equity Market – June 2020 Market performance – in June, Turkish equities performed the best (+7.7%), while Hungary was the weakest (-2.2%). Following its rebound in the past couple of months, the MSCI EM Europe Index declined in June, losing 1.8% in EUR terms and 0.6% in local currency terms. Turkish equities were the best performers, with the ISE30 Index +7.7%, followed by Prague’s PX Index (+3.5%), and the WIG20 (+2.3%). After its good run in May, the Romanian BET lost 0.3% in June, while the Russian MOEX was down 2%. Greek equities declined 2.1%, while the worst-performing index was the...

BCS Fixed Income Daily: Economics, Gazprom, LUKOIL

IMF downgrade, US jobs weakness, COVID resurgence Ahead: Cautious trade at play. The IMF again downwardly revised its global growth forecast, projecting 2020 GDP of -4.9%, lower than the -3% predicted in April. Enthusiasm will be further tempered ahead of US jobless claims, which are expected to remain extraordinarily high, while a resurgence in confirmed COVID-19 cases in the US (as well as Germany, LatAm), linked to the reopening of businesses, is also dimming the economic recovery outlook. In turn, Brent has retreated, albeit is finding some support from US-China trade hopes. Mark S Bra...

Ronald Smith ...
  • Vasiliy Mordovtsev

BCS Initial Coverage: Oil & Gas – L-T Bullish, S-T Savvy

We are L-T bullish on the entire Russian Oil & Gas sector, projecting $50/bbl in the M-T – albeit cautious that oil prices may have recovered too much, too soon. Top Picks – LKOH, SNGSP on a risk-minimizing view. – L-T Bullish: Valuations underpinned by historically low risk-free rate … … our conviction that oil will return to $50/bbl in the medium term – S-T Savvy: Be ready to play – Oil prices could give up gains this summer … … falling back to the $30-$35/bbl range for a time – LKOH (Buy): A Top Pick – Low-beta, high-yield play but material upside – SNGSp (Buy): Most defensive, Expec...

Kirill Chuyko

BCS Coverage Update: Oil & Gas Sector – Transfer of Coverage

We are pleased to announce that Ronald Smith has joined the BCS GM Research Team as Lead Oil & Gas Analyst. Ron brings a wealth of experience, which will strengthen BCS research product and services. Ron will take over coverage from Kirill Tachennikov, who will move to another role within BCS Research – we sincerely thank Kirill for his contributions as an O&G analyst. Commencing immediately, Ron will be providing continuous and timely coverage and assessments of important events and news flow on the sector and companies. To ensure a seamless Transfer of Coverage, Ron will publish his Init...

Dave Nicoski ...
  • Ross LaDuke

Vermilion Compass: Weekly Equity Strategy

The recent successful test of support at the 200-day moving average has paved the way for a meaningful bounce higher on the S&P 500. Given this bounce, we have become incrementally more bullish. In today's report we highlight the bullish implications of the recent move higher for the broad market as well as other big picture trends: • Bullish implications. Not only has the 200-day moving average and prior lows continued to hold for the S&P 500, but the index is also hitting a higher high relative to mid-April - a bullish development. Additionally, the index is inflecting topside a descending...

Raiffeisen Centrobank Equity Daily 27.07.2020

 AT: Kapsch TrafficCom - Loss of contracts, US cost overruns and software issues drive 1Q preliminaries deep into the red (negative)  AT: Wienerberger - Good 2Q performance, company lifts lower end of FY 20 l-f-l EBITDA guidance and now eyes EUR 460-480 mn (positive)  CZ: CEZ - Bulgarian court cancelled ban on CEZ selling local assets to Eurohold (positive)  PL: Lotos - 2Q 20 preliminary clean earnings in the black, but reported earnings heavily impacted by PLN 0.8 bn one-offs (negative)  RO: Digi Communications - Competition Council approved takeover of RGUs from its competitor AKTA (neu...

Ronald Smith ...
  • Vasiliy Mordovtsev

BCS Initial Coverage: Oil & Gas – L-T Bullish, S-T Savvy

We are L-T bullish on the entire Russian Oil & Gas sector, projecting $50/bbl in the M-T – albeit cautious that oil prices may have recovered too much, too soon. Top Picks – LKOH, SNGSP on a risk-minimizing view. – L-T Bullish: Valuations underpinned by historically low risk-free rate … … our conviction that oil will return to $50/bbl in the medium term – S-T Savvy: Be ready to play – Oil prices could give up gains this summer … … falling back to the $30-$35/bbl range for a time – LKOH (Buy): A Top Pick – Low-beta, high-yield play but material upside – SNGSp (Buy): Most defensive, Expec...

Kirill Chuyko

BCS Coverage Update: Oil & Gas Sector – Transfer of Coverage

We are pleased to announce that Ronald Smith has joined the BCS GM Research Team as Lead Oil & Gas Analyst. Ron brings a wealth of experience, which will strengthen BCS research product and services. Ron will take over coverage from Kirill Tachennikov, who will move to another role within BCS Research – we sincerely thank Kirill for his contributions as an O&G analyst. Commencing immediately, Ron will be providing continuous and timely coverage and assessments of important events and news flow on the sector and companies. To ensure a seamless Transfer of Coverage, Ron will publish his Init...

Kirill Tachennikov ...
  • Vasiliy Mordovtsev

BCS O&G Monthly Digest: Oil price outpaces demand – Stay cautious

International – OPEC+ 9.7mbd cut extended through July – IEA upgraded 2020 oil demand forecast to 91.7mbd Russia – Oil producers posted weak 1Q20 IFRS – EBITDA falls almost 2x q/q – Novatek reported 1Q20 IFRS – EBITDA -33% q/q, as expected; FCF positive – Gazprom published 4Q19 IFRS – Negative FCF, EBITDA flat q/q – Surgutneftegas reported 2H19 IFRS – P&L in line, net cash exceeds c$50bn – Transneft – 2019 DPS may be paid in installments – Lukoil¬ BoD recommends 2H19 DPS of Rb350/sh – Lukoil diamond asset sale may be invalidated – $700mn loss – Gazprom owed $2bn from Turkish gas importers Ki...

BCS Equity Daily: Fund Flows, LUKOIL, Norilsk Nickel, Mechel, Alrosa, Sberbank, Sistema, Rushydro, X5 Retail Group

Recovery, OPEC+ hopes, ECB ‘600’ Ahead: Tempered into the weekend. The ‘Russia trade’ appears ripe for some bargain hunting after the kneejerk Norilsk-led selloff yesterday. Indeed, the economic ‘reopening’ card is still at play and, bolstering risk appetite, OPEC+ appears set to meet on 6-7 June to discuss extending current record-level cuts beyond June – easing some angst as the meet had been expected to held yesterday, but was delayed due to commitment issues, which thus far remain. Also to the upside, the ECB – joining the ranks of other central banks that of late have offered up massiv...

BCS Fixed Income Daily: Economics, Gazprom, LUKOIL

IMF downgrade, US jobs weakness, COVID resurgence Ahead: Cautious trade at play. The IMF again downwardly revised its global growth forecast, projecting 2020 GDP of -4.9%, lower than the -3% predicted in April. Enthusiasm will be further tempered ahead of US jobless claims, which are expected to remain extraordinarily high, while a resurgence in confirmed COVID-19 cases in the US (as well as Germany, LatAm), linked to the reopening of businesses, is also dimming the economic recovery outlook. In turn, Brent has retreated, albeit is finding some support from US-China trade hopes. Mark S Bra...

BCS Fixed Income Daily: Oil, Lukoil

Re-openings, OPEC+, ECB bets v Econ prints, OPEC+ Ahead: Caution at play. Signs point to cautious trade. To the upside, trade will again be buoyed by the hoped for improving global economic outlook, prospect of an OPEC+ extension and largess from yet another central bank (ECB expected to reveal a stimulus package). Still, as has been typical in the current environment, any enthusiasm will be held in check by pending economic data points (today) that are certain to remind of the fallout from COVID-19. Headlines that signaled OPEC+ may backpedal on the preliminary agreement to extend the curre...

BCS Fixed Income Daily: Lukoil, IMH

Recovery hopes, $36 Brent v lingering risks Ahead: Time ripe to sell into strength. Trade has exhibited a spate of exuberance – justified to a degree as countries worldwide begin to ease their economy shattering lockdowns. Brent has recouped some lost ground on the improved demand outlook, buoyed also by headlines that OPEC+ is committed to staying the course on output cuts as well as the Russia Energy Ministry’s projection that the market will rebalance by July. However, clear and present risks – 2nd wave COVID-19, souring US-China relations – cannot long be ignored, suggesting players will ...

BCS Fixed Income Daily: Economics, Borets, LUKOIL

Russia lockdown extended; Fed-speak, US GDP on radar Ahead: Selling uptick at play. The variables that drove markets higher yesterday remain intact, yet they will likely be muted, on the backburner. The healthy uptick is certain to encourage some players to play the ‘sell into strength’ tactic, given uncertainty over the trajectory of COVID-19 and the duration and depth of its impact on global growth. Indeed, domestically, Russia will remain under pressure for yet longer – President Putin yesterday extended the lockdown to 12 May. And, adding to the incentive to remove some cash, US GDP is sl...

Yuri Golban

BCS Placement Preview: Lukoil (Baa2/BBB/BBB+) – New 10Y notes ... fair YTM at 3.60-3.65%

Lukoil – one of the largest oil companies in Russia – will place new 10Y USD-denominated Eurobonds today. We see fair YTM at 3.60-3.65%. - Lukoil has the strongest credit metrics and highest ratings in Russia - FCF in 2019 hit a record high, despite weak oil prices … … maintaining net leverage close to zero - Refinancing risks are immaterial, given substantial cash reserves o New placement should improve debt maturity profile - BCSe: Revenue and EBITDA to fall in 2020 due to market conditions o Significant worsening of credit profile unlikely, given margin of safety - We estimat...

Research Team

The Rear-View Mirror – EME markets: Equity returns mixed as rebound forces weaken

EME Equity Market – June 2020 Market performance – in June, Turkish equities performed the best (+7.7%), while Hungary was the weakest (-2.2%). Following its rebound in the past couple of months, the MSCI EM Europe Index declined in June, losing 1.8% in EUR terms and 0.6% in local currency terms. Turkish equities were the best performers, with the ISE30 Index +7.7%, followed by Prague’s PX Index (+3.5%), and the WIG20 (+2.3%). After its good run in May, the Romanian BET lost 0.3% in June, while the Russian MOEX was down 2%. Greek equities declined 2.1%, while the worst-performing index was the...

Research Team

WOOD Daily: CCC PW; LPP PW; GR Macro; EME Macro/Strategy – ECB; OPL PW; LKOD LI; FP RO; LVC PW; MOEX RX; BFT PW; CAR PW

HEADLINES: • Polish retailers: out of the wood(s), towards the new normal (reinitiating on CCC with a BUY; LPP stays HOLD) • Greece macro: no need to be pessimistic, but structural efforts must continue • EME Macro/Strategy: ECB - all going according to plan • Orange Polska: to record provision release on jubilee bonuses in 2Q20E POSITIVE • Lukoil: 1Q20 conference call takeaways NEUTRAL • Fondul Proprietatea: Hidroelectrica approves RON 750m in special dividends NEUTRAL • LiveChat Software: LiveChat customer base reaches 30k POSITIVE • Moscow Exchange: class lawsuit filed against the excha...

Research Team

WOOD Daily: LKOD LI; MOH GA; ING PW; PPC GA; WIZZ LN; CPS PW; VESBE TI; ENA PW; DPEU LN; EU Refining and Petrochemicals; TL Macro; PZU PW; ALRS RM

HEADLINES: • Lukoil: 1Q20 results - slightly negative due to higher capex, lower FCF NEGATIVE • Motor Oil Hellas: 1Q20 results - net loss on inventory effect • ING BSK: issues update on rate cuts impact on 2020E results NEGATIVE • Public Power Corporation: takeaways from the 1Q20 earnings call NEUTRAL • Wizz Air: 4Q20 conference call takeaways • Cyfrowy Polsat: management recommends PLN 1 DPS from 2019 net profit NEUTRAL • Vestel Beyaz: plans to distribute TRY 129m in dividends NEUTRAL • Enea: signs LOI with Iberdrola on offshore wind farm projects • DP Eurasia: trading update on COVID-19 i...

Research Team

WOOD Daily: PL Banks; EME Macro/Strategy – ESI; ETE GA; ALPHA GA; CDR PW; KER PW; PZU PW; KRU PW; WXF AV; PBK RO; ATRS AV; AEGN GA; MPARK TI; CIE PW; BRISA TI; WPL PW; OTP HB; SAB1L LH; ALR PW; MBK PW; SPL PW; BVB RO; NRP NA; MOEX RX

HEADLINES: • Polish banks: NBP cuts reference rate to 0.1%, implying structural risks for Polish banking sector NEGATIVE • EME Macro/Strategy: a W-shaped recovery ahead? • National Bank: 1Q20 - decent numbers and outlook, upside risk for our forecasts POSITIVE • Alpha Bank: 1Q20 in line, message reassuring POSITIVE • CD Projekt: 1Q20 - better again, mainly on The Witcher 3, FX supportive • Kernel: 3Q20 EBITDA 13% above our forecast; FY20E farming segment forecast increased POSITIVE • PZU: posts big miss, purely on Alior Bank goodwill write-down NEGATIVE • Kruk: 1Q20 delivery • Warimpex: 1...

Research Team

WOOD Daily: Emerging Europe Refining; RU Energy; TL Macro; RU Macro; FIVE LI; WXF AV; NLMK LI; PL Banks; PEO PW; SVST LI; CCC PW; FMF PW; TEN PW; OMV AV; SNP RO; HTO GA

HEADLINES: • Emerging Europe refining: time to wash your hands of refining? (Hellenic Petroleum, Lotos, MOL, Motor Oil Hellas, NIS, OMV, OMV Petrom, PKN Orlen, Tupras) • Russian oil & gas: risk/reward less attractive (Lukoil and Tatneft downgraded to HOLD, Rosneft upgraded to BUY) • Turkey macro: fearless • Russia macro: CBR cuts key rate by 50bps to 5.50% • X5: 1Q20 in line, margin dilution, despite strong demand • Warimpex: 4Q19 - capping a successful year, COVID-19 not an existential issue • NLMK: cuts previously recommended 4Q19 dividend NEGATIVE • Polish banks: credit holidays to tu...

With a more favourable environment, PJSC LUKOIL 144A ADR improves to Slightly Positive

PJSC LUKOIL 144A ADR (RU), a company active in the Integrated Oil & Gas industry, is favoured by a more supportive environment. The independent financial analyst theScreener has confirmed the fundamental rating of the title, which shows 3 out of 4 stars, as well as its unchanged, moderately risky market behaviour. The title leverages a more favourable environment and raises its general evaluation to Slightly Positive. As of the analysis date June 16, 2020, the closing price was USD 77.66 and its potential was estimated at USD 86.97.

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