OMV upgraded to "sector perform" by RBC on conflict-driven prices
RBC upgraded Austria's OMV to "sector perform" from "underperform", citing the oil, gas and chemicals company's positive exposure to refined commodity prices driven by Middle East conflict and European gas storage levels. The broker believes OMV's torque to refining and European gas can drive resilience, with shares reflecting most of the negative news.
RBC has upgraded Austria's OMV to "sector perform" from "underperform", saying the oil, gas and chemicals group has positive exposure to the impact of the Iran conflict on refined commodity prices and European gas storage levels. The broker said OMV could benefit from "snowballing" commodity prices because of the US-Israeli war on Iran, with that trend further supported by Ukraine's attacks on Russian refineries. It added that it sees OMV's underappreciated torque to refining and European gas as a factor that should support resilience and possibly lead to near-term earnings upgrades.
RBC said shares already reflect the "majority of bad news" and identified the main risk as further asset damage, while noting investor hesitancy tied to Middle East risks. The stock is up nearly 50% year-to-date as of Monday's close. 46). It noted that Morgan Stanley, HSBC and Barclays have also lifted their respective target prices for the company since the end of September.
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