UniCredit Reiterates its HOLD Rating on OMV

October 11 00:00 2011

LONDON, October 11 (RainbowNewsLine.com) – Analysts at UniCredit Equity Research maintain their HOLD rating on the shares of OMV (WBAG: OMV). The target price is set to €30.00.

Analysts at UniCredit Bank Equity Research, in a research note published yesterday, mention that the company has addressed all the issues facing it through the presentation of its new strategies. The company would benefit from its increased focus on exploration and production while reducing exposure to refining activities, the analysts believe. The analysts make the following observations.

  • CEO Gerhard Roiss exhibited the new company strategy by increasing E&P business, being more focused integrated Oil & Gas Company, improving overall returns and minimizing exposure to refining and marketing.
  • Company to expand the business through new developments in Yemen, the UK and Tunisia, moreover by increasing exploration activities and making new bold acquisitions.
  • OMV recognizes obstacles in long-term refining and marketing, and plans to reduce capital employed in these operations from 53% to 25%.
  • Production in Libya is yet to start next year, which reduces the projections of 2012E EPS by around 5% and an increase by around 3% in ‘13E.

The investment highlights for OMV would be the company developing a more mature exploration and production portfolio or any major acquisition of assets in upstream business. According to the analysts,  Neptune well results, investment decision on Nabucco project and Romanian gas price liberalization may trigger the stock movement. The OMV scrip is trading at a 10% discount as compared to its peers and considering above factors the analysts justify the HOLD rating.