Investing.com -- RBC Capital Markets upgraded OMV AG (VIE:OMVV) to "sector perform" from "underperform" on Tuesday, saying much of the negative news surrounding the Austrian energy producer is already reflected in its shares while stronger refining margins and European gas prices could support near-term earnings.
RBC raised its price target, although the new target is below OMV's €71.20 share price at the October 5 close. Shares of OMV rose 0.8% to €71.60 in afternoon trading on Tuesday.
RBC said OMV's exposure to refining and European gas is underappreciated by investors, helping offset risks from its Middle East assets.
The brokerage said OMV ranks second only to Equinor in sensitivity to European gas prices among the integrated energy companies it covers, while its refining cash-flow sensitivity is among the highest in the group.
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RBC said the impact of the conflict on commodity prices is increasingly positive for refiners and European gas, with Ukrainian attacks on Russian refineries supporting refined-product prices and low European gas storage raising the risk of price spikes into winter.
It expects structurally strong refining margins to persist into 2027 and potentially longer.
At the same time, RBC remains cautious about OMV's Middle East exposure. Borouge International's delayed listing and the halving of its 2026 dividend had resulted in around €1.5 billion of lost or delayed cash proceeds for OMV this year.
RBC said the main risk now is further damage to the company's assets in the region.
RBC is tactically positive on OMV ahead of its third-quarter trading update on Friday, October 9, forecasting net income of €1.315 billion, 28% above Visible Alpha consensus.
RBC expects OMV's refineries to capture strong margins during the quarter, although Romania's temporary solidarity contribution on crude extraction and refining from August through October will partly offset the upside.
Original Article
RBC upgrades OMV to Sector Perform, raises target to €70 on refining, gas
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