MOL: prices, pumps, and polyol (upgraded to BUY)
We have upgraded MOL to BUY (from Hold), with an updated price target (PT) of HUF 3,123 (from HUF 2,224), offering upside of 33.5%. Although we still have reservations over corporate governance issues, with the treasury shares having been transferred to Foundation ownership, the wave of positive macro indicators is just too strong to ignore. Oil prices are into triple digits and gas prices are 4-5x normal levels. Refining margins have recovered, but still have upside, with more demand on the way. Consumer services is benefiting from organic growth but, after the deals are completed in 2022E, more stations in Poland, Hungary and Slovenia should join the network. Polyol is heading for mechanical completion in late-2022E, while the Rijeka upgrade should be done and dusted in 2024E. We see its cash flow as sufficient for maintaining a rising dividend and investing in its long-term strategic goals. Following the return of profitability, MOL now trades at P/Es of 4.0x for 2022E and 4.8x 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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