Jefferies upgrades Genel to ‘buy’, lifts price target
Genel Energy
78.60p
16:35 07/11/24
Jefferies upgraded Genel to ‘buy’ from ‘hold’ on Wednesday and lifted the price target to 100p from 85p.
Oil & Gas Producers
8,103.52
17:04 07/11/24
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.