MOL: an invisible hand, once more (stays BUY)
We maintain our BUY rating on MOL, with an updated 12M price target (PT) of HUF 3,500 (from HUF 3,590), offering 32.8% upside, despite an increase in the risk free rate. In the past two weeks, MOL has seen its business benefit from the lifting of the price caps in Hungary, with the simultaneous imposition of a 95% windfall tax on Urals crude differentials. This simplifies the business, removing a number of unquantifiable risks. The refining business is still benefiting from huge diesel cracks, even without the differentials. Risks remain over the supply of Russian crude, post the sanctions, but we believe that MOL can manage either way. The upstream business is selling gas at prices well above the normal level and, although crude oil prices are down from their highs, the business remains very profitable. The newly-expanded consumer services business can now return to normal levels of profitability. MOL continues to trade at a discount to its peers, on our estimates, with a P/E of 3.6x for 2023E, versus 5.7x for its peers, and an EV/EBITDA of 1.9x, compared to 4.2x for its peers.
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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