MOL: end of the age of crazy (stays BUY)

We maintain our BUY rating on MOL with an updated 12M price target (PT) of HUF 3,810 (from HUF 3,500 previously), offering 37.3% upside. Both oil and gas prices have normalised: oil from the recent lows and gas from the record highs. Refining margins are enjoying another extraordinary period, while petrochemicals are in the doldrums. On aggregate, we see the environment as benign, boosting earnings. Perhaps more importantly, the regulatory and tax burdens are simplifying and normalising. In 2024E, only revenue taxes will remain, and at a much lower rate, while windfall taxes and extra royalties should just be an unpleasant memory. In 2024E, production in Azerbaijan should increase, while the Iraqi pipeline concerns may come to a conclusion. Polyol is coming onstream slowly, while the Rijeka upgrade should contribute in 2025E. The entrance into Poland and expansion in Slovenia is making the consumer business more significant. We expect dividend yields of >10 over the next three years. MOL trades at P/Es of 3.8x for 2023E and 4.2x for 2025E, on our estimates, compared to the medians of 4.0x and 6.2x for its peers.