- Gazprom (OTCPK:OGZPY) is downgraded to Neutral from Buy at Citigroup, which says earnings are at risk in the low commodity price environment, and any dividend increase likely will be delayed.
- Citi’s commodities team sees oil in the low $50s through 2016, and the firm estimates that Gazprom will generate less than $30B/year of EBITDA in 2015-17, a level not seen in a decade; Gazprom should have enough cash to fund priority projects, but a dividend boost likely gets pushed beyond 2017, Citi says.
- However, Citi likes Lukoil (OTCPK:LUKOY, OTC:LUKOF), even though it is a crowded trade because of its double-digit dividend growth, with an interim payout due sometime this fall, being a potential catalyst; anything less than a dividend of $1.13/ADR would disappoint, the firm says.