Norilsk Nickel - Strong Fundamentals
Roman Abramovich's Crispian Investments recently sold a 1.7% stake in Norilsk Nickel into the market. Together with its affiliates, Crispian continues to hold 4.7%, including 4% for which Interros and Rusal reportedly have right of first refusal. Rusal has reiterated that Norilsk Nickel is a strategic investment for the company. Vladimir Potanin has continued to buy shares from the market, which we believe may be a more economically sound approach to building his stake than initiating a shootout. Thus, we believe that there are low chances of the conflict reigniting in the same form as it did in 2018. We thus recommend looking at Norilsk Nickel's fundamentals, which are exceptionally strong thanks to rising commodity prices. We raise our target price 18% to $26.20 per GDR and reiterate our BUY recommendation.MMC Norilsk Nickel PJSC is a global producer of nickel, palladium, platinum and copper. Co. also produces by-products, such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulfur. Co. is involved in prospecting, exploration, extraction, refining and metallurgical processing of minerals, as well as in production, marketing and sale of base and precious metals. Co.'s production facilities are located in five countries: Russia, Australia, Botswana, Finland, and South Africa. Co.'s production units are integrated and include: the Polar Division (the Taimyr Peninsula); and the Kola Mining and Metallurgical Company (Kola MMC or the Kola Peninsula).
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