Haitong rises assessment of Galp Energia 6% to 11,20 euros – Magazine Saturday

11:11 • Business

By Raquel Godinho – Business Journal

Haitong updated estimates for Galp Energia, which presents its accounts next Friday, April 29th. In addition, included the company’s new goals for the period between 2016 and 2020, announced the “Capital Markets Day”. In this regard, analysts increased the target price by nearly 6% to 11.20 euros and reiterated the recommendation to “neutral”.
“We have adjusted our numbers before the presentation of the results of the first quarter, particularly to include new targets for 2016-20 released by Galp on ‘Capital Markets Day’, both in terms of exploration and production (delayed Lula West and North to Atapu after 2020) and investment plan (15% cut), ” said the statement of Haitong, published Monday
in addition, the investment bank cut estimates results in the “gas & amp; power.” after the cutting of the assets remuneration rates (RoR) recently proposed by the regulator for the distribution business. However, this effect, “was offset by a higher contribution from refining and distribution area,” by which the bank left its estimates for EBIT between 2016 and 2018, virtually unchanged.
Justify the price rise target of 10.60 euros to 11.20 euros was also “the lowest investment in exploration and production and a higher value of associated assets (international ‘pipelines’ / Tupi).”
“we recognize that Galp has a very strong competitive position in exploration and production due to a ‘break-even’ (financial balance) average in the projects below 30 dollars per barrel and a leading position in the sector in terms of annual growth, “explain the analysts at however, believe that these factors are already “largely discounted” by investors.
Concerning estimates, the numbers of the investment bank are broadly in line with the oil. The Haitong estimates an average annual growth of exploration and production, between 2015 and 2020 of 28%, the investment between 2016 and 2020 amounts to 1160 million and EBITDA get an average annual growth of 14% between 2015 and 2020.
with regard to the numbers of the first three months of this year, which will be known at the end of the week, Haitong expects adjusted EBITDA down 4% from the previous quarter to 298 million due to a lower contribution from refining and distribution businesses. But the net result is expected to fall 19% over the last quarter of last year to 120 million euros, was broadly in line with the value obtained in the previous year (121.1 million euros). The
new listed the target price led by Carlos Gomes da Silva (pictured) is, however, a potential devaluation of 6.4%, taking into account the current share price. And, “unless investors have a more optimistic outlook for the price of Brent than us (65 dollars per barrel) and refining margins Galp ($ 2.5 per barrel), will be hard to believe that actions can appreciate significantly from here, despite the high quality portfolio of exploration and production of Galp, “said the bank.
in this regard, analysts recommend investors bet on Repsol to be exposed to a potential recovery in oil prices. . The Spanish oil company has a recommendation from “buy” and a price target of 17.40 euros
The oil shares follow devalue 1.32% to 11.92 euros.Nota: the news does not dispense consultation note of “research” issued by the investment house, which can be requested from the same. The Business alert to the possibility that there are conflicts of interest in some investment banks in relation to listed analyzed as holdings in its capital. To make investment decisions should refer to the note of “research” in full and learn from their financial intermediary.

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