OMV: Hitting cruise control (downgraded to HOLD)
We downgrade our recommendation on OMV from Buy to HOLD, with a revised 12M price target (PT) of EUR 56.9 (up from EUR 42.4), offering 3.8% upside. We remain bullish on the transformation that has jettisoned low-margin businesses or those with high investment requirements and replaced them with low-cost production. We believe that downstream margins should remain reasonably good in 2018E, while oil and gas prices should be above the 2017 level. We see a company with a better balanced upstream portfolio, reduced costs per barrel and 61,000boe/day higher production volumes than 12 months earlier. However, we believe that, following the 64% share price appreciation in the past 12 months, the improvements are now priced in. We also see little upside for oil and gas prices in the short term, and risks to downstream margins.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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