Raiffeisen Bank Upgrades Romania's OMV Petrom to 'Hold'

Raiffeisen Bank said on Thursday it has upgraded its recommendation on Romanian oil and gas group OMV Petrom [BSE:SNP] to 'hold' from 'reduce' while keeping the target price for the stock at 0.35 lei ($0.09/0.08 euro).

"The stock price dropped by 10% since our last update and at the current level we think that the downside is fundamentally limited, hence we upgrade our recommendation [...]," the bank's analysts said in a statement.

After cutting the projections for the crude price, production and operating expenses per barrel of oil equivalent and accounting for the stronger US dollar, the bank's earnings before interest and taxes (EBIT) estimates for the upstream segment stand on average 6% lower compared with its former projections.

Raiffeisen expects the downstream oil segment to become a much stronger contributor to the group EBIT, generating on average $220 million per year in clean cost of supplies EBIT.

"All in all, our medium term forecasts do not differ much from our prior estimates."

Blue chip OMV Petrom was trading up 0.90% at 0.3350 lei on the Bucharest Stock Exchange by 1614 CET.

Source: SeeNews