Gazprom: Structurally higher profits, record dividends (stays BUY)
In this report, we have raised our 12M price target (PT) to USD 14/GDR, while maintaining our BUY recommendation on Gazprom. In our view, more corporate discipline and higher regulatory uncertainty are likely to weaken the price signal for global gas supply. Besides, following the 43% increase in LNG supply in 2015-20 (+146mt), the world will see much more moderate growth in new capacity until 2026E (+16%, or 78mt), based on our analysis of the publicly-announced projects. All this should keep the gas market tighter than previously. The key question is to what extent Gazprom might share this upside with the minority investors. The new dividend policy, based on a 50% payout ratio, makes us moderately optimistic on this issue.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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