Investment banks find gas business of Rosneft unappreciated

According to reports of world investment banks, they have confirmed high forecasts on Rosneft’s shares after publication of the company’s financial results in 2013, and JP Morgan increased its recommendation to “to buy”.

Thus, the Citi’s report notes that on the average the company generated about $9.5 billion of operational cash flow in each quarter of 2013 and, according to it, Rosneft won’t have difficulties with the financing of its necessary amount of capital investments. Analysts also think that costs control has become a key issue for the company. “Representatives of the management enumerated measures of cost control, including a policy of “zero inflation” for purchased goods and services,” – the bank comments on. The Citi’s recommendation concerning shares of Rosneft is “to buy”.

In turn, specialists of BofA Merrill Lynch note generation of the company’s free cash flow, costs control and synergy from acquisitions. “Besides, Rosneft showed good figures of capital investments and operational expenditures; at the same time, the company managed to reduce ratio of capital investments/extracted barrel by 7.6%,” – the report says. The BofA Merril Lynch’s recommendation is “to buy”.