On Wednesday, CFRA raised its rating on OMV AG (OMV: AV) (OTC: OMVKY) shares to Hold from Sell, maintaining a price target of EUR40.00 in view of a recent 20% drop in OMV's share price.
The share drop was influenced by concerns over a potential disruption in gas supply from Gazprom (MCX:GAZP). The market's reaction to this warning is believed to have been fully absorbed, said an analyst from CFRA.
OMV reported its Q2 2024 earnings before interest and taxes (EBIT) at EUR1.23 billion, marking a 4% increase year-over-year but a 17% decrease from the previous quarter. The performance was in line with the consensus estimates.
The quarter-over-quarter decline was attributed to a lower refining margin and a seasonal dip in Gas Marketing & Power. However, these were partially offset by stronger chemical margins, with significant quarterly increases in propylene, polyethylene, and ethylene prices.
The company has revised its 2024 outlook for polyolefins, now expecting polyethylene margins to exceed USD400 per ton, up from the previous USD350-400 range, and polypropylene margins to be around USD400 per ton. Meanwhile, refinery utilization expectations have been adjusted downward to 90% from the prior estimate of 95%.
CFRA has left other guidance metrics largely unchanged, with refining margins anticipated to be USD8 per barrel, down from USD12 in 2023, and hydrocarbon production forecasted to be between 330,000 and 350,000 barrels of oil equivalent per day (boe/d), a decrease from 364,000 boe/d in 2023. The firm forecasts earnings per share (EPS) of EUR7.10 for 2024 and EUR7.20 for 2025 for OMV.
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