Gazprom: Most Appreciation Potential In Its Sector

Estimated net present value [NPV] for buy-recommended Gazprom (OGZPY.PK) increased to $62 a share from $56 on May 29 when we raised our long-term oil price assumption to $66 a barrel from $60. Beyond NPV, Gazprom has more appreciation potential than any stock in our coverage because it is concentrated on natural gas reserves that not only are the largest of any company and almost any country, but also are priced at practically the lowest value in the stock market.

Strong earnings and cash flow for 2006 reported on June 28, which met our projections, have brought the stock trend to the intersection with its 200-day average and to the cusp of resuming upward momentum by that measure.

The main bet investors make in the stock is that price controls will be eliminated gradually, if not sooner. While political developments in Russia spark lively discussion, we see an alignment of interests for the Russian people and the shareholders of Gazprom. The stock can become the most credible symbol of success for a country rich in premium energy resources as it makes money for its investors - including the Russian government.

Originally published on June 29, 2007.

Comments

[dealjunkie:]

will you still like Gazprom after Putin leaves?

2007 Aug 16 02:15 PM