Goldring sees the OMV Petrom share in the range of 0.78 - 0.82 lei, above the market price

The Department of Analysis and Market Strategies of the brokerage house Goldring maintains its price target for the share of OMV Petrom (SNP) in the range of 0.78 - 0.82 lei, estimated in the spring, according to a report published at the end of last week.

It is a price of 5.6 - 11% above the Friday quotation of the company's share, of 0.7385 lei.

The report shows that OMV Petrom's revenues fell by 11% in the third quarter of the year, compared to the same period last year, to 9.43 billion lei. "This decline was mainly caused by lower prices and volumes for sales of natural gas and electricity. The results are, however, partially offset by the increase in electricity prices," according to the document. CCA's net profit attributable to shareholders decreased by 33%, reaching 1.38 billion lei, from 2.06 billion lei in the third quarter of the previous year.

"The sharp decline reflects the difficulties encountered in the regulatory environment and increased costs, the impact of the solidarity contribution and regulations that negatively influenced profit margins in natural gas and electricity," according to Goldring.

In the first nine months, OMV Petrom generated revenues of 26.7 billion lei, a 6% decrease compared to the same period of the previous year. "Major factors (n.e. influencing the result) included the drop in international oil and natural gas prices and the lower volume of sales in the Gas and Energy segment," according to the report. EBITDA was significantly impacted by lower margins in all business segments, particularly in Refining and Marketing, where the refining margin decreased by 58%. "The cash flow from operational activities decreased by 26%, to 5.98 billion lei, while the extended flow, after the payment of dividends, recorded a cash outflow of 1.75 billion lei", according to the report.

For 2024, OMV Petrom forecasts an average price of Brent crude between $80 and $85/barrel, in line with general market forecasts for a moderate price stabilization, despite fluctuations caused by geopolitical uncertainties and OPEC+ production policies. This forecast is also within the range expected by other major financial institutions, reflecting the fragile balance between slow-growing global demand and factors limiting supply, such as production cuts by the OPEC+ cartel and potential disruptions in Middle East production, they said. those of Goldring.

For the last quarter of the year, the team of the brokerage house estimates that OMV Petrom will obtain revenues from sales to external customers of approximately 9.3 billion lei, which would result in exceeding the budgeted figures for the entire year by approximately 9%. "As for the expected net result, for the last quarter of the year we estimate reporting a figure of approximately 1.1 billion lei, which results in a net result for the entire year of approximately five billion lei, slightly below the budgeted values by the management ", the report states.

For this year, OMV Petrom has budgeted a net profit of almost 5.2 billion lei, 31% above that of 2023.

The estimation of the target price range of the OMV Petrom share by Goldring is based on the discounted cash flow method, by which they obtained a price of 0.7837 lei per security, and the multiple valuation method, by which they obtained a price of 0.824 lei per title. The estimate has a time horizon of twelve months.

The Austrians from OMV own 51% of OMV Petrom, while the Romanian State, through the Ministry of Energy, has 20.64% of the oil and gas producer, whose stock market valuation amounts to 46 billion lei.