Raiffeisenbank has raised the target price on Rosneft shares by 67 percent to $ 11 per GDR. This is the highest target price of the company’s shares among all investment banks. This follows from the bank message.
Increasing the target price occurred as a result of accounting by the Bank for the inclusion of the NPV part of the East Oil project in assessing the shares of the company. At the price of oil in 60 dollars per barrel and a premium for oil quality of $ 5 per barrel. NPV “East Oil” is calculated by a bank at 89 billion dollars. NPV rises to 100 billion dollars when used in a bunch of $ 10 per barrel.
The increase in the target price was also influenced by the forecast of a significant improvement in Rosneft financial indicators in 2021. Thus, Rosneft Margin “Rosneft” amounted to 15 percent, dividend yield – 7 percent or 38 rubles per share. EBITDA growth in 2021 is expected to 61 percent to 26.8 billion dollars compared to 2020, SDP will grow to $ 11 billion.
The bank reduced the weighted average cost of Rosneft’s capital from 9.1 to 8.8 percent as a result of reducing the risk of risk of share capital for Russia by 0.5 percent to 7.25 percent.