Equity Analysis /

Russian Gas - Initiation of Coverage: An Exciting Business and an Exciting Opportunity

    Anton Korytsko
    Anton Korytsko

    Senior analyst, Oil & Gas

    11 September 2019
    Published by
    We initiate coverage of Gazprom with an Overweight Rating (O/W) and a 12M target price of RUB299 per share. We view the promised increase in the dividend payout ratio, with a c.3x increase in DPS from the pre-May 2019 expectations, as a major change in the Gazprom investment case, to be translated into similar increase in equity valuation on a 3-year horizon. We initiate coverage of NOVATEK with an Equalweight Rating (E/W) and a 12M target price of RUB1,414 per share. We believe the operationally excellency that has been consistently demonstrated by the company finally found its way into its equity valuation last year, leaving limited upside barring a more optimistic macro forecast.