Erste Bank has downgraded the shares of Hungarian fuels group MOL to ‘Hold' from ‘Accumulate' and also cut its target price to UF 22,800 from HUF 26,050. In its latest monthly CEE Oil & Gas research Erste said MOL was still facing difficulties in finding appropriate growth targets, predicting that it would postpone the top acquisition target, Croatian INA.
After the sale of its natural gas assets to E.ON, MOL now has a much stronger balance sheet, Erste's Tamás Pletser said, adding MOL was urgently seeking new acquisition targets, such as Croatia's INA, whose privatization may happen during the second half.
MOL is also looking for upstream opportunities in Russia and Kazakhstan and Pletser said the friendlier political relationship between Russia and Hungary could help the company.
He said the privatization of Serbia's NIS could take place in the autumn, adding MOL might also find an opportunity here.
“Finally, we believe that Romania's private oil company, Rompetrol, could be a perfect target for MOL. MOL can spend up to USD 4bn on new targets and capex, which is needed to maintain growth momentum and create a healthier balance sheet," Pletser said.
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