OMV confirmed at BUY, TP EUR 57.0 - Model update: Still an appealing long-term investment story
Our updated DCF model points to a 12m target price of EUR 57.0 (EUR 60.0), which is mainly the result of a weaker petchem margin that we project in the short to medium term. At the same time, we keep our BUY call for OMV, as we believe that the long-term investment case of the company remains valid. The stabilisation of upstream production at around 500 kboepd with a potential increase to 600 kboepd on the back of existing and new fields (i.e. ramp-up of production in Malaysia and the UAE, developing Achimov IV/V and Neptun Deep), a higher contribution of the most recent acquisitions (i.e. Ruwais refinery in the UAE) and the potential returns on the participation in the Nord Stream-2 project are still not fully priced in, in our opinion. Consequently, we see long-term developments outweighing short-term uncertainties (i.e. production interruption in Libya, potential negative earnings surprise in 4Q 19, regulatory risks around Nord Stream-2). Therefore, we maintain our positive stance on OMV.OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
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