Jefferies upgrades Genel to ‘buy’, lifts price target

Jefferies upgraded Genel to ‘buy’ from ‘hold’ on Wednesday and lifted the price target to 100p from 85p.

It noted that the shares have been volatile in the past couple of months as various media reports suggesting an imminent Iraq-Türkiye export pipeline reopening have proved incorrect.

"Having initiated at hold, we now upgrade to buy, seeing re-opening risk as over-sold, and a solid balance sheet with net cash to remain above $100m throughout 2024 supported by local sales, even if exports do not restart," it said.

Jefferies said there are a number of catalysts this year which could impact Genel’s share price: the resumption of exports via IraqTürkiye pipeline; clarity on the recovery of $107m of Kurdistan Regional Government (KRG) receivables; potential M&A; and a successful Miran & Bina Bawi arbitration result.

"While there may be upside to shares from catalyst successes, we believe long-term shareholder value is dependent on a resumption of pipeline exports and payments framework," it said.

"This should allow for more certainty in the company cash flows and optionality for growth via M&A, which we believe is a key variable for E&P stock performance."

At 1040 GMT, the shares were up 2.2% at 84.82p.