BRK Financial Group, the only brokerage house listed on the Romanian Stock Exchange, initiated coverage for the shares of the natural gas producer Romgaz with the recommendation Buy and a target price of 9.5 euros per share, calculated by the discounted cash flows method.
Compared to the price of 7.5 euros per share on 16 February, the growth potential is 27 %.
BRK said that with the inclusion of the Neptun Deep project, whose value is estimated at 650 million euros (50 % stake in the project), the growth potential could reach up to 50 %.
Romgaz recorded a net profit in the amount of 234 million euros in the first nine months of 2021, which is by 22.7 % higher compared to the same period last year. The company’s revenues in the first nine months of the year increased by 19.8 % year-on-year, reaching 707.5 million euros. Revenues from natural gas sales rose by an annual 25.6 %, while revenues from underground gas storage operations dropped by 30.7 %. Revenues from electricity sales increased by 27.5 % year-on-year in the January-September 2021 period.
Romgaz produced 3.706 billion cubic meters of natural gas in this period, which is 15.9 % more compared to the same period in 2020, while electricity production dropped by 31 % to 426 GWh.
