MOL: there’s gain in the mundane (stays BUY)
We maintain our BUY rating on MOL, with an updated 12M price target (PT) of HUF 3,600 (from HUF 3,810), offering 22% upside. Upstream projects in Azerbaijan, Hungary and Kazakhstan are boosting short-term production. Oil prices look stable, while we forecast a EUR 38/MWh gas price for 2025E. Most of the arbitrary taxes are now history. Refining margins remain at healthy levels, although petrochemicals margins are still poor. The Rijeka coker should boost margins and volumes later this year, and the polyol plant should start contributing as well. Recent retail expansions offer further opportunities for unit growth in volumes and profitability. MOL’s net debt/EBITDA should peak at 0.86x, on our estimates, by the end of 2024E. We see dividend yields of >10% over the next three years, in keeping with recent trends. We expect broadly flat earnings for 2025-27E, putting the stock on a P/E of 4.2x, compared to the medians of 6.7x and 5.1x for its peers, 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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