Gazprom became the most expensive company in Russia. Shares Ambition or calculation
Natural gas production in Russia has been one of the most profitable areas for quite a long time. Throughout the country is full of deposits of this resource. Gas is produced by the transnational corporation Gazprom. There are several other small companies, but they are affiliated with Gazprom and do not operate separately from it.
About the concern
Gazprom is the world's largest organization for gas production, processing and sale to all segments of the population. In addition to activities related to gas production activities, the company is engaged in the following:
- oil production;
- sale of fuel among the population;
- export of resources to other countries.
In addition, Gazprom is the owner of the largest natural gas reserves: the share of the world's volumes is 16.9%, according to Russian Federation - 60 %.
The main gas pipelines laid on the territory of Russia also belong to this company. And the provision of gas to other countries is also carried out by transferring the resource through the pipes of Gazprom.
According to the data published on the website of the organization, it can be said that all the company strives for is to provide its consumers with gas in a timely and sufficient manner, and in addition, to comply with intergovernmental agreements and not allow doubts about its reliability.
But Gazprom's ultimate goal is to reach world stage as a global company.
Are the group's shares popular?
As you know, the gas giant is very popular among the population. Gazprom shares are the most attractive investment option. Among the shareholders - and the state, while it takes first place.
The state company Rosneftegaz also bought out some of Gazprom's shares. Thanks to this action, the state became the owner of a controlling stake, which is 50.002%.
Judging by the demand for shares, it will not be surprising that in the ratings of the largest corporations on the planet, Gazprom occupies a place in the top ten. On the other hand, according to Bloomberg journalist Anders Asland, “No other large company in the world is run as mediocrely as the Russian Gazprom.”
What were the forecasts for 2015?
Taking into account the development of gas production activities since the start of Gazprom, the shareholders were confident that this company will always be in value. For example, during 2005, the share price rose at a tremendous rate. The capitalization of Gazprom changed over the years only in a positive way. 2006 was also significant, because it was in this year that the corporation entered the top ten in the ranking of the most
The market capitalization of Gazprom in 2007 was about $300 billion. No one doubted the monumental gas giant. The top manager was going to implement his plans, which included an even greater capitalization of the company (Gazprom).
It was the most successful for the corporation. Then there was the maximum capitalization of Gazprom, which amounted to 365.1 billion dollars.
The corporation was hit hard in 2014. Unrest in Ukraine led to a decrease in the use among Ukrainian citizens. The countries actually broke the agreement on the supply of fuel.
Based on these events, one could judge the beginning of the fall of the gas giant, because Ukraine purchased approximately 10% of the resource supplied by Russia.
What happened to Gazprom in 2015?
This year was unsuccessful for the corporation. Within a few months, capitalization fell, Gazprom was worth a little over $40 billion. Competitors in terms of value, that is, Sberbank and Rosneft, were growing in price, and the gas giant was tilting more and more.
Nevertheless, at the time of 2015, the corporation was the leader in the rating based on information from the Moscow Exchange.
If we analyze what was the capitalization of Gazprom from 2014 to 2015, the dynamics over the years will show a drop by as much as 20%. Such numbers for one year can signal a very unstable position of the company.
Accordingly, the gas production itself also decreased. The level of production fell to 414 billion cubic meters. These indicators are the lowest, and the capacity of Gazprom's equipment is designed for a large scale.
Competition: Gazprom - Rosneft
As you know, competitors are even politically trying to influence the course of the concern. The vice-president of Rosneft advocated the abolition of the export monopoly of Gazprom. There were also demands from rivals to split the gas giant into smaller companies.
In addition, judging by how much the competitive capitalization is now, Gazprom can be squeezed out of the first positions in the world market.
In April 2016, trading on the London Stock Exchange brought Rosneft to a higher level for the first time. Capitalization also increased, while Gazprom lagged behind by $18 million.
Shares of "Gazprom" - against the shares of Sberbank
Not only Rosneft influenced the fall of the corporation. Ordinary shares of Sberbank at the end of August 2016 suddenly exceeded the capitalization of Gazprom shares.
The two largest corporations in Russia clashed at the auctions of the Moscow Exchange. The capitalization of Sberbank suddenly exceeded the value of Gazprom by more than 100 billion rubles. And this is far from the limit, especially given the current depreciation of Gazprom shares.
How did 2016 stand out for the gas corporation?
As mentioned above, competitors in exchange trading began to gradually put pressure on the concern, which had been knocked down by the events of 2014. For seven years (from 2008 to 2015), capitalization decreased by almost ten times, Gazprom was losing its positions on world stock exchanges.
Oddly enough, despite a desperate struggle with rivals, the corporation was able to raise its value at auction to almost $100 billion. Of course, when comparing the maximum and today's results, this is still not enough.
One can wonder for a long time about the negative attitude of potential shareholders towards Gazprom. One thing is clear: the corporation's development forecasts for 2017 are quite disappointing.
What threatens the bankruptcy of "Gazprom"?
For starters, we must not forget that the corporation is currently busy building a gas pipeline with a length of two and a half thousand kilometers. The cost of such construction is about thirty billion euros. In addition, the construction of new gas pipelines leads Russia only to huge costs and a decrease in the size of fuel production.
Gazprom is also betting on an increase in export prices for gas transit. According to experts, this step is ill-conceived and can lead to the ruin of the company. The buyer is always looking for a cheaper, expensive product of the same quality does not cause a desire to purchase it.
If the gas giant really goes bankrupt, more than four hundred thousand people risk being left without jobs. Gas prices for households and businesses in general will skyrocket. Despite the fact that Russia is the country with the most gas deposits, it can still be left without this fuel.
The reaction of President Vladimir Vladimirovich Putin to the remark about the fall of the corporation can be considered strange. He believes that there is absolutely nothing dangerous in this fact, emphasizing the lack of an alternative to natural gas.
The problem also exists in the negative impact of Gazprom's difficulties on the state budget. After all, more than ten percent of the country's financial condition was provided by the corporation's income. And the entire oil and gas arsenal is generally forty percent. With the possible bankruptcy of Gazprom, there is a huge risk for the stability of the state economy as a whole. To prepare for possible problems, it is necessary to review now economic course countries.
Even if we take into account what was the capitalization of Gazprom over the years, and reasonably assess the situation based on facts, it is impossible to predict the exact development of the situation.
Shares of "Gazprom" on Tuesday became the growth leader among others blue chips". The capitalization of the company increased by 100 billion rubles. The reason for such positive dynamics was the statement by Russian President Vladimir Putin that the company's papers are undervalued. In addition, the attention of investors to the securities attracted a potential increase in dividends - up to 50% of net income under IFRS. Experts believe that the growth of Gazprom shares in the coming days may continue. However, it is doubtful that it will be long-term.
The locomotive of yesterday's growth on the stock market was the papers of Gazprom, which added about 3%. The day before, Vladimir Putin announced that the holding's papers, which recent times lagged behind the market, “undervalued”. Gazprom is clearly underestimated, this is an absolutely obvious fact. We are not going to sell it yet, and this is due to the features Russian economy, social sphere and the Russian energy sector,” Vladimir Putin said in an interview with Bloomberg.
The agency recalled that the gas monopoly's revenue over the past decade amounted to over $1 trillion, but over the same time, market capitalization decreased by more than 80% in dollar terms against the backdrop of growing shale gas production in the United States, the stagnation of the economies of the company's largest European customers and the collapse in prices for oil.
Vladimir Putin also noted that he was not worried about the company's quotes, noting the stability of Gazprom as a state concern and its central role in the socio-economic life of the country. In addition, he stressed that the company is increasing exports to Europe, which is currently reducing its own production, and is building the first pipeline to China. And the forecast for the growth of global demand for gas remains good. “We know what Gazprom is, what it is worth and what it will cost,” the Russian president said.
Investors remembered the shares of Gazprom. Capitalization national treasure increased by 3%, or 100 billion rubles - up to 3.3 trillion rubles. Since 2009, most Russian securities, including Sberbank, Rosneft, MTS, Bashneft, have grown significantly. At the same time, Gazprom's shares "marked time" for seven years at the levels of 130-160 rubles, - said Roman Tkachuk, senior analyst at Alpari.
According to him, there were certainly objective reasons for this - a decrease in exchange prices for gas (in 2008 they fell by 2-3 times and have not risen since then), protracted negotiations on gas supplies to China and large-scale investment costs.
Yesterday's statement by Vladimir Putin about the undervaluation of Gazprom and the potential increase in dividends make investors take a closer look at this paper and may become drivers for its growth, Roman Tkachuk noted.
Recall, yesterday it became known that the Russian Ministry of Finance has developed a draft decree on the introduction of an indefinite norm, obliging state-owned companies to pay dividends in the amount of at least 50% of net profit under IFRS.
- Gazprom is underestimated not only in relation to Western counterparts, but also to Russian market. The index of the largest companies on the Moscow Exchange MICEX10 has risen by 15% since the beginning of the year, while the growth of Gazprom shares over the same period could hardly exceed 3%. At the same time, the company has been demonstrating a stable net profit under IFRS for three quarters in a row, - says Dmitry Lukashov, an analyst at IFC Markets.
He noted that Gazprom shares are currently trading at an absurdly low P/E ratio of 3.1.
I believe that the main reason for this is the political risks associated with the terms of the third energy package in the EU. If some of them are leveled, then, in my opinion, one can count on a vigorous growth in Gazprom's quotations. Specific price levels it is difficult to determine now, but the shares may well rise in price by about a third of the current levels, - Dmitry Lukashov believes.
However, Anastasia Ignatenko, an analyst at TeleTrade Group of Companies, believes that, apart from “verbal interventions”, there is no other reason for the growth of Gazprom shares.
After set peaks in 2007, the share price fell 2.64 times, and over the past decade it is perhaps the worst blue-chip stock. Gazprom has been in need of reforms for a long time, especially in terms of corporate governance, she said. Anastasia Ignatenko noted that the paper is trading at the level of 140 rubles and a turning point in the technical picture should be expected only if the level of 142 rubles is exceeded.
But even in this case, we can only talk about the presence of speculative potential for growth, for the appearance of signals of the medium-term plan, the price needs to go beyond the zone of 165-170 rubles, no less, she believes.
Roman Tkachuk believes that the growth of Gazprom shares may continue in the coming days. In his opinion, the current goal of the rise is the level of 150 rubles. If the news about the increase in dividends of the "gas monopoly" is confirmed and there is progress in negotiations with China, the shares may well rise to 200 rubles.
If you remember the history, then at the peak in 2008, 367 rubles were given for a Gazprom share, he recalled.
Analytika Online's financial expert Sergey Dushechkin agrees that the growth in the value of shares will continue for some time, but it is unlikely to be long-term, as the selling pressure will not disappear anywhere.
The ceiling for any nascent growth will be the levels of 155-160 rubles per share, going above which in the current economic and political situation will be quite difficult. And the achievement of the values indicated above is also a big question, he concluded.
Gazprom shares fell to attractive levels. The potential for lower gas prices is limited. A progressive dividend policy will support the shares.
Trading plan:
Purchase from the level of 208 rubles. For the purpose of 255 rubles. Horizon up to 9 months. Yield up to 22.6% excluding dividends.
Factors for:
dividend policy. In 2019, Gazprom adopted a new dividend policy, according to which by 2022 the company will reach the level of payments of 50% of adjusted profit. At the end of 2019, the company will pay 30% of profit, and this year it may not be adjusted for items that reduce the base for paying dividends. Based on the ruble exchange rate of 62 per dollar, the company in July 2020 can pay about 16.8 rubles. At current prices, this amounts to a 7.7% dividend yield. Such a dividend yield will help keep quotes from a significant drawdown.
The potential for lower gas prices is limited. Gas prices are approaching the cost line for US LNG suppliers in Europe. Gazprom on the Investor Day estimated this level in the range of $120-125 per thousand cubic meters, or about $3.2-3.5 per MMBTU. In February, prices on the Dutch TTF hub fell below $3 per MMBTU and continue to remain below this mark.
According to Platts, LNG prices in Asia fell to $2.1 per MMBTU in February. This situation in the export markets for American gas companies leads to an even faster fall in domestic prices for Henry Hub. NYMEX prices pegged to this hub have been at their lowest levels since March 2016, around $1.77 per MMBTU. For many gas producers, such prices turned out to be on the margin of profitability (taking into account non-monetary costs).
Prospects for the growth of export deliveries. Gazprom expects that in the next 3-5 years, due to a decrease in its own production, demand for gas in Europe will increase by 25-30 billion cubic meters per year. If Gazprom manages to maintain its market share at 36%, the company could expect at least $1.3bn in additional revenue even at the current low prices.
In the coming years, the level of deliveries to China, due to the strength of Siberia, will grow by about 5 billion cubic meters per year, which will also significantly increase operating cash flows Gazprom.
Protection against devaluation of the ruble. A significant part of Gazprom's revenue consists of export deliveries in foreign currency.
Technical picture. Gazprom shares broke through the area of 215-216 rubles. and approached the lower border of the short-term downward channel. On the daily and weekly charts, oscillators indicate significant oversold conditions.
slowdown global economy and correction of global stock markets amid the spread of the coronavirus.
Maintaining gas prices in Europe near the current minimum levels for a long time (from six months or more) against the backdrop of tougher competition with LNG.
Warm winter and cool summer 2020
BCS Broker
for 9
months before
$208.00
$181.41
$255.00
Ferrari
Trading plan:
Buying from the level of $153.5 with a target of $156.6 for a period of 7 days. Potential trade profit = 2%. Loss limit is set at the price level of $147.4
Factors for:
Ferrari shares unfairly fell due to the general panic in the markets. The company operates in the luxury segment of the automotive industry and, even in the short term, will suffer very little due to the crisis caused by the coronavirus;
The margin of the company is very high, the debt is low, and the business is growing steadily;
Reporting in recent quarters is better than investors' expectations;
Ferrari has a strong and successful brand in its segment of the car market, one of the few automotive companies to consistently increase financial performance and capitalization.
Negative news background.
Ferrari (RACE), price chart:
VK: https://vk.com/bot_bcs
for 7
days before
153,50 $
152,57 $
156,60 $
Netflix
Trading plan:
Buying from the level of $374.00 with a target of $381.5 for a period of 7 days. Potential trade profit = 2.0%. The loss limit is set at the price level of $359.1.
Factors for:
NETFLIX is one of the few beneficiaries of the current crisis associated with the coronavirus pandemic and general quarantine (in conditions of home isolation, the demand for streaming services is growing strongly);
The technical picture - the proximity of the psychological mark of $400 will pull the price up for its test;
General positive in the Internet business sector;
NETFLIX is the leader of the streaming business in the world, successfully competing with Disney and Microsoft. The company has a fairly efficient business, investors clearly underestimate this asset;
Revenue and profits are growing steadily year on year, financial position very stable.
The ongoing coronavirus pandemic is making markets extremely volatile;
Negative news background.
Netflix (NFLX) price chart:
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for 7
days before
374,00 $
373,52 $
381,50 $
mastercard
Trading plan:
Buying from the level of $246.5 with a target of $251.5 for a period of 7 days. Potential trade profit = 2%. The loss limit is set at the price level of $236.7.
Factors for:
Shares of Mastercard fell after the US market by almost a third, but have already worked off part of the decline. In my opinion, the company will be among the least affected by the current crisis, because. consumer demand is now completely focused on online payments. The company's shares can quickly recover their positions;
Mastercard released a positive Q4 report, with earnings per share nearly 10% above investors' expectations. Against this background, the shares rose, but then all the growth was leveled, as a result, a favorable price was formed for a short-term purchase;
Growth of the payment systems sector;
Positive trends in the fintech sector;
Growth of non-cash payments in the world;
Globally, stocks are in a strong uptrend;
Improvement of technologies and growth of monetization.
The ongoing coronavirus pandemic is making markets extremely volatile;
Negative news background.
MASTERCARD (St. Petersburg) (MA), daily chart:
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for 7
days before
246,50 $
239,95 $
251,50 $
Alibaba
Trading plan:
Buying from the level of $194.0 with a target of $197.9 for a period of 7 days. Potential trade profit = 2%. The loss limit is set at the price level of $186.3.
Factors for:
China quickly overcame the economic downturn caused by the coronavirus. This is evidenced by the PMI data - the indicator both in the industry and in the service sector rose above 50 points;
In the context of the coronavirus, the demand for e-commerce is growing more and more against traditional retail;
The quarantine regime in many countries will further support the shares of Alibaba, the leader in the e-commerce sector;
Consumers are increasingly choosing to buy goods online;
Alibaba Group is the only e-commerce company in the world that competes on equal terms with the American giant Amazon.com.
The ongoing coronavirus pandemic is making markets extremely volatile;
Negative news background.
Alibaba (BABA) price chart:
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for 7
days before
194,00 $
192,00 $
197,90 $
3M Company
Trading plan:
Buying from the level of $138.91 with a target of $144.47 for a period of 30 days. Potential trade profit = 4%. The loss limit is set at the price level of $127.81.
Factors for:
Expectation financial assistance from the state and a significant decline in the share price are the main reasons for the price rebound that we are now seeing;
The stock breaks through the $138 resistance.
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for 1
month before
138,91 $
135,50 $
144,47 $
Delta Air Lines
Trading plan:
Buying from the level of $138.10 with a target of $143.63 for a period of 30 days. Potential trade profit = 4%. The loss limit is set at the price level of $127.06.
Factors for:
Financial injections from the state and a significant decline in the share price are the main reasons for the price rebound that we are now seeing;
Buying a stock now provides an opportunity to capitalize on the greed of investors who started buying shares from the bottom, without waiting for the situation with the spread of the virus to improve;
Breakdown of $138 resistance is possible further growth prices.
The growth that we are now seeing is most likely temporary. The market can turn down at any moment.
3M Company (MMM), price chart:
for 1
month before
29,88 $
28,54 $
31,08 $
Magnet
Trading plan:
Purchase from the level of 3180.0 rubles. with a goal of 3308.0 rubles. for a period of 32 days. Potential return transactions = 4.03%. The loss limit is set at the price level of 2925.8 rubles.
Factors for:
Magnit shares have been building a growing trading channel for more than a week, rebounding from a low of 2289 rubles;
A channel with a very clear lower boundary. The price, reaching it, immediately bounces up;
The market is now experiencing increased interest in the shares of retailers due to the high demand for a certain grocery basket because of the coronavirus. Magnet is a mass store where many will go for strategic products.
Deepening correction in the Russian stock market.
Magnit (MGNT), price chart:
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for 1
month before
3180.0 RUB
3202.5 ₽
3308.0 RUB
Adobe
Trading plan:
Buying from the level of $317.00 with a target of $331.50 for a period of 30 days. Potential trade profit = 4.57%. The loss limit is set at the price level of $291.66.
Factors for:
The company increases sales volumes and reduces the debt burden;
The stock chart turned out to be in the oversold zone, strong growth to $340 is possible;
Third quarter 2019 revenue was above analysts' expectations;
The company maintains a strong position in the core market.
Strengthening the correction of the American stock market.
Adobe (ADBE) price chart:
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for 1
month before
317,00 $
314,00 $
331,50 $
LUKOIL
Trading plan: Speculative purchase of Lukoil shares from the level of 4635 rubles. Target 5200 rub. Horizon 3 months. Potential yield up to 12.1%.
High dividends. At the end of 2019, Lukoil may pay dividends in the amount of 542 rubles. per share, said the head of the company Vagit Alekperov during a conference call following the results of financial results 2019
Taking into account the already paid 192 rubles. per share for the first half of the year, dividends payable in the summer of 2020 may amount to 350 rubles. on paper. The dividend yield for half a year in this case will be 7.5% - a historical maximum.
Buyback by account borrowed money. During the conference call, it was also indicated that the buyback announced by Lukoil could be carried out at the expense of borrowed funds. This is positive news as the company's net debt is close to zero. This means that when a buyback is launched due to an increase in the debt burden, the financial condition of the company should not worsen.
Strong oversold. Lukoil shares are more than 30% off their historical peaks. Despite the worsening situation on the oil market, such a large-scale drop in a fundamentally strong chip looks redundant. As energy prices stabilize, market participants may reconsider the company's outlook, which should lead to an increase in shares.
The investment idea is short-term and involves increased risks, given the high volatility in the stock market.
You can earn additional returns on investments by opening an Individual Investment Account (IIA) and claiming a tax deduction.
BCS Broker
for 3
month before
4635.0 RUB
4715.0 RUB
5200.0 RUB
Children's World
The dividend yield of Detsky Mir is still attractive. New formats and the development of online sales can accelerate business growth.
Trading plan:
Purchase from the level of 105.2 rubles. for the purpose of 123 rubles. for up to 9 months. The potential profitability of the transaction is up to +16.9%, excluding dividends. At the same time, the dividend cut-off will take place with the payment of supposedly 4.75 rubles. per share. If the dividend cutoff occurs before the target level is reached, the investment idea will be closed after the target profitability of the transaction is completed.
Factors for:
Business growth. The company reported for 2019 revenue growth by 16.1% y/y, to 128.7 billion rubles. LFL sales grew by 7.2% y/y. The increase in sales is mainly due to the growth of traffic, which indicates the high competitiveness of the company. The EBITDA margin grew at a similar rate to revenue, indicating continued strong margins. The company is increasing the share of its own brands in the sales structure.
Operating results slowed growth slightly in Q4, but results from international expansion continue to increase at a substantial pace. Revenue in Kazakhstan increased by 48.1% over the year. First results open shops in Belarus exceeded management expectations, the company set its sights on the Kyrgyz market.
New formats. Detsky Mir is testing a new ultra-small format of the Detmir.ru store. It is both a retail store and an online order pickup point. It is assumed that the new format will increase the presence of Detsky Mir in small towns and expand the geography of delivery. Internet sales of the company for 2019 grew by 64.5%, the share in total revenue already amounted to 11%. This is the fastest growing business segment. The company even made a full-fledged application for smartphones.
dividend yield. Despite the active expansion of the network, the company pays generous dividends twice a year. Interim payments for 9 months of 2019 amounted to RUB 5.06. According to the Reuters consensus, the potential dividend for 2019 could be RUB 9.81. Then, taking into account the payment of interim dividends, you can count on another 4.75 rubles. in May-June 2020. This is approximately 4.5% of the dividend yield. The company will present a consolidated report for 2019 on March 2, 2020. Then the exact final dividends for 2019 will become known.
Expectation of stabilization of the macroeconomic base. The implementation of national projects involves total expenditures of more than 25 trillion rubles. until 2024. Part of these funds should ultimately help increase the disposable income of the population and increase turnover retail. In addition, the retailer should be supported by an increase in child support and an extension of the payment period from three to seven years. The Ministry of Economic Development predicts the growth of real incomes of the population in 2020-2021. by 1.7% and 2.2%, retail trade turnover - by 2% and 2.6%, respectively.
Technical picture. Shares of Children's World after the revaluation stopped growth near 120 rubles. Panic sales brought prices even below the attractive level of 110 rubles. These local highs were observed in 2017 after the IPO.
Supply chain disruption and temporary decline in demand due to coronavirus outbreak in China
Slowdown of network growth and/or decrease in profitability due to increased competition.
The sale by Sistema of the entire stake in Detsky Mir may raise uncertainty about maintaining the current dividend policy.
BCS Broker
for 9
months before
$105.20
$91.02
$123.00
Applied Mtl.
In the technology sector, a new investment cycle is ripe in promising technologies for 5G data transmission, artificial intelligence, flexible OLED displays, etc. The first to benefit from the new cycle are manufacturers of equipment for manufacturing chips and displays. One of the leaders in this sector is the American Applied Materials. The company is traded on NASDAQ and on the St. Petersburg Stock Exchange under the ticker AMAT.
Trading plan:
Purchase from the level of $58 (on the St. Petersburg exchange) with a target of $75 for up to 12 months. Potential profitability of the transaction = 29.3% excluding dividends. Dividends for fixed time can bring another $0.63-$0.84 or about 1-1.5%.
Factors for:
New technological vectors. The company is one of the leaders in the design of technological solutions for the production of semiconductor chips and displays. Promising technologies such as equipment for 5G networks, virtual reality, artificial intelligence, the Internet of Things require an update of the base for the production of appropriate devices. Demand for Applied hardware and services is supported by the cloud computing boom. The company also expects a recovery in investment demand for equipment for the production of memory chips.
Diversified sales markets. The geography of AMAT deliveries is extensive. In addition to the United States, the company supplies equipment and related services to the dynamically developing Chinese market, as well as to technology hubs in South Korea, Japan and Taiwan. Among the largest clients of the company are such market leaders as Intel and Samsung.
US-China trade deal. The first phase of the trade deal with China removed a significant part of the risks from the company. Due to lower investment activity and trade disputes, AMAT recorded a 12.5% YoY decline in revenue and a 25% YoY profit decline in FY2019. But according to the results of the I quarter. 2020 fiscal year The company reported a confident recovery in financial performance. Revenue rose 11% YoY to $4.16 billion. Net earnings per share (EPS) rose 20% to $0.96.
According to the agreements reached between Beijing and Washington, the PRC has committed itself to additional purchases of electrical equipment, manufacturing machines and other engineering products annually for $33 billion from 2020 and $44.8 billion from 2021. We believe that Applied Materials is one of the main beneficiaries of a trade transaction.
Strong outlook for 2Q and 2020. Despite the risks from the coronavirus outbreak in China and beyond, management remains strong in its outlook for the next quarter and 2020 as a whole. The company plans revenue in the II quarter at $4.14-4.54 billion, which is about 25% higher than last year's figures. Adjusted earnings per share could rise by 40-50% y/y to $1-1.1. According to the Reuters consensus forecast, profit for the entire fiscal year 2020 could increase by 32.5%.
Dividends and buyback. The company is an example of a growing business in the technology sector and does not pay high dividends. Quarterly payments are $0.21. For the year, the yield can be 1.5% at current share prices. But according to the Reuters consensus, the dividend from next quarter could rise to $0.22. In addition, the company is conducting a buyback, and remains committed to continuing this practice. In the I quarter In fiscal 2020, the company returned $200 million to investors in the form of a buyback, against $192 million in dividends.
Low debt load. The Net Debt/EBITDA leverage ratio is only 0.3x. Debt/Equity leverage is at a comfortable level of 0.6x.
Technical picture. The sell-off in the markets due to fears of the spread of the coronavirus COVID-19 returned AMAT quotes to the lows of January 2020. In the area of $56-57 passes strong support. It is also worth noting that the quotes turned out to be near the lower border of the ascending channel, in which the paper is recovering after reducing the risks of escalating trade wars.
Shift in the investment cycle in the technology sector due to the consequences of the coronavirus outbreak
A significant slowdown in the global economy due to the outbreak of a new disease (> 0.3% y / y) may cause a deeper correction in technology stocks and global stock markets in general.
The capitalization of Sberbank by 5.2 billion rubles, reaching 5.234 trillion rubles. Since the beginning of trading on the Moscow Exchange Gazprom» has risen in price by 3% to 5.23 trillion rubles, while the cost of Sberbank has decreased by 0.1% to 5.22 trillion rubles.
Gazprom's shares rise in price on the news that the company is developing a new dividend policy. Information about this is contained in the presentation of the gas holding. Adopt a new dividend policy " Gazprom”plans already this year, in the next two or three years the company expects to start paying shareholders 50% of its net profit under IFRS, Alexander Ivannikov, head of the Gazprom financial department, said earlier.The presentation of the company also said that at the end of 2018 “Gazprom » is going to pay record dividends - 16.61 rubles. per share (393.2 billion rubles, or 25.7% of net profit). At the same time, according to Ivannikov, the company will not pay dividends from "virtual" profits: "We will clear the profit from paper."
Following the shares of Gazprom, the Moscow Exchange index soared, which on Monday for the first time in history crossed the mark of 2700 points (p.). By 13.06 Moscow time, it rose to 2743.81 points - this is a new historical maximum. In the structure of the Moscow Exchange index, the securities of Gazprom have the largest weight - 16.71%.
The second company by capitalization " Gazprom”became May 14. Then the value of the company increased by 16.52% and amounted to 4.49 trillion rubles. The historical maximum in the capitalization of Gazprom was recorded on May 19, 2008 - 8.7 trillion rubles.
« Gazprom» was the most expensive Russian company until April 2016 - then " Rosneft” for the first time overtook the gas holding in terms of value - the quotes of the oil company rose due to good reporting, while there was no positive news from Gazprom at that time. In August 2016 Gazprom» moved to third place in terms of capitalization, losing second place Sberbank. After " Gazprom”For some time was inferior to Lukoil and even Novatek.
Investors have long been frustrated by the rather modest dividends of Gazprom, which, coupled with the unpredictability of the investment program, the volume of tax exemptions and political risks negatively affected capitalization, says Dmitry Marinchenko, Senior Director of Fitch Corporations. “The recent rally in share prices is almost entirely due to increased dividend payouts and the hope that a new level will become the norm. Interestingly, this is happening against the backdrop of a significant decline in gas prices in Europe and intensified competition with LNG, including the US, which is likely to lead to a drop in exports by the end of the year. It is not yet clear to what extent the deterioration in the market situation is taken into account in the current quotes,” says Marinchenko.
Against the backdrop of news about the planned revision of the dividend policy, the growth of capitalization is natural, says Andrey Polishchuk, an analyst at Raiifeisenbank. If the latest statements by top management are accompanied by an increase in profitability and a decrease in capital expenditures, then the current level of 5 trillion rubles will - not the limit, says Polishchuk. According to Raiffeisenbank estimates, the fair value of one share of Gazprom is now at the level of about 255 rubles, which corresponds to a capitalization of just over 6 trillion rubles.
Rosneft for the first time overtook Gazprom in terms of capitalization, both in Moscow and London. The ruble price of the oil company's shares reached a historic high
Rosneft on Monday overtook Gazprom for the first time in terms of market capitalization. At 13.40 Moscow time, the value of the oil company on the Moscow Exchange was 3.468 trillion rubles, the gas concern - 3.450 trillion rubles. By the end of the trading day, Rosneft lost its leadership on this site (its capitalization amounted to 3.44 trillion rubles against 3.49 trillion rubles from Gazprom). But at the close of trading on the London Stock Exchange, Rosneft was still ahead of its competitor: there, its capitalization at the end of the day amounted to almost $51.67 billion (plus 4.2% compared to the opening of trading), and Gazprom — $51.49 billion (plus 1.21%).
The ruble price of Rosneft shares on Monday also updated its historical maximum - at the close of trading on the Moscow Stock Exchange, the company's share was worth 325 rubles. a piece. The previous record is 318.05 rubles. per share was established on March 22. During the day, the company's shares rose by 2.69% while the MICEX index rose by 1.58%. The cost of Brent oil on Monday rose by 1.81% to $42.68 per barrel.
Rosneft owes the new record primarily to an increase in oil prices (from the lows of the beginning of the year, Brent has already risen in price by 50%), analysts interviewed by RBC say. Conjuncture in the gas market, on the contrary, plays against Gazprom - European prices are at historical low at $130 per 1 thousand cubic meters. m, says Alexander Kornilov, senior analyst at Aton, the concern also has no prospects for increasing supplies to Europe, taking into account the end of the heating season.
Financial results
Rosneft's revenue in 2015 decreased by 6% (to RUB 5.15 trillion), but EBITDA grew immediately by 17.8% (up to 1.25 trillion rubles). Net profit of the state-owned company in rubles increased by 2%, amounting to 355 billion rubles The devaluation helped: in dollar terms, Rosneft's profit fell by 34.4%. Rosneft's net debt in dollar terms decreased by 47% at the end of the year, to $23.2 billion, the ratio of debt to EBITDA was 1.12.
Gazprom has not yet reported under IFRS for 2015. According to Renaissance Capital forecasts, the gas concern's EBITDA will be RUB 1.98 trillion, net profit - RUB 780 billion
The growth in the capitalization of Rosneft is also due to the fact that the state-owned company is included in the privatization plan, said Ildar Davletshin, an analyst at Renaissance Capital. Investors expect that this year there may be 19.5% of the shares of the state-owned company for sale. Since the beginning of the year, Rosneft's receipts in London have risen in price by 40% against 18% for Gazprom. So far, the oil state-owned company is outpacing both the private LUKOIL (plus 30%) and the entire Russian energy sector (plus 22%) in terms of growth, the expert says. For comparison, over the same period, the quotes of the world oil majors in the oil industry grew by only 2%, while companies developing countries- by 5%. Finally, in London, Rosneft's quotes are supported by the low liquidity of ADR - in a growing market, demand for its papers is growing faster than that of the gas monopoly, Davletshin notes.
Compared to Gazprom, Rosneft now looks more flexible, stable and promising company, even taking into account the large debt, says Sberbank CIB analyst Valery Nesterov . The gas concern's quotes are under pressure from large-scale infrastructure projects abroad, the prospects for the implementation of which remain in doubt. Bloomberg, citing interviewed experts, assumed that Rosneft could catch up with Gazprom in terms of capitalization as early as 2016. Gazprom is facing tougher competition and falling prices to the lowest levels in more than a decade on the European market, and must spend billions of dollars on new gas pipelines, Andrey Polishchuk, an analyst at Raiffeisenbank, noted in a recent commentary for Bloomberg.