OMV: turning oil fields into yields (upgraded to BUY)
We have upgraded OMV to BUY (from Hold), with an updated price target (PT) of EUR 53.9 (from EUR 44.9), offering upside of 23.4%. We see headwinds for the petrochemicals business, which has become far more significant, and OMV has lost its Russian business. However, the upstream and refining businesses are enjoying a very benign macro, with strong margins and high gas prices driving profits in these segments. The completion of the Baystar and Kallo projects in 2023E, plus the Borouge expansion by 2025E, should boost petrochemicals volumes in cost-advantageous regions, in our view. Management has already announced a dividend proposal of EUR 5.05/share from the 2022 earnings and special dividends whenever possible. OMV is trading at a P/E of 3.9x in 2023E, on our estimates, versus its peers at 5.4x.OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
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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