MOL's FCF generation ability looks set to remain resilient and strong
We arise our oil price estimates for 2018 and 2019 to USD 72/bbl for 2018 and USD 70/bbl for 2019 from our previous estimates of USD 57/bbl and USD 60/bbl, respectively. Accordingly, we lifted our clean CCS EBITDA forecasts for 2018 and 2019 from HUF 625 bln and HUF 622 bln to HUF 670 bln (unch. YoY) and HUF 650 bln (-3% YoY), respectively. However, the higher WACC applied amid the currently rising yield environment and higher specific investing risks associated with emerging markets makes it reasonable to leave our 12-m TP unchanged at HUF 3,208; yet leaving a 12% upside potential from the current share price. Our TP is justified by a stable mid-term earnings and FCF outlook against the backdrop of still supportive refining margins, products volume growth and oil prices stabilizing above USD 70/bbl.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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