MOL: a multi-faceted, 3D Hungarian puzzle (stays BUY)
We maintain our BUY rating on MOL with an updated 12M price target (PT) of HUF 3,590 (from HUF 3,123), offering 25.0% upside. In the last few months, MOL has been the beneficiary of a number of developments and the victim of a number of others. This makes its prospects difficult to assess, in our view. After twisting and turning the puzzle from each angle, we have concluded that, on balance, the upside has it. We see the cost of price caps reaching HUF 544bn in 2022E and the windfall tax costing HUF 203bn. For both we are assuming that they end in 2024E. On the other hand, we see HUF 609bn in extra profit from Russian crude differentials in 2022E, in addition to a stunningly-positive oil macro environment. High refining margins should help deliver 2022E downstream EBITDA at 102% higher vs. 2021, while oil and gas prices should push 2022E Upstream EBITDA up 64% yoy. MOL now trades at P/Es of 2.8x for 2022E and 4.0x for 2024E, on our estimates.
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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