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OMV Petrom (BVB: SNP) Stock

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Actiuni OMV Petrom (BVB: SNP)
Cristian Cochintu
Cristian Cochintu
30 October 2023

After an impressive 2023, OMV Petrom shares became even more popular among Romanian investors and top-performing international funds. While you can buy SNP shares directly, sometimes it is worth considering an ETF with SNP representation.

OMV Petrom S.A. is the largest energy company in South-East Europe, with activities in Exploration and Production, Refining and Marketing, Natural Gas and Electricity. OMV Petrom S.A. is the largest energy company in South-East Europe, with activities in Exploration and Production, Refining and Marketing, Natural Gas and Electricity. 

The company's shares have been traded under the stock symbol SNP since 3 September 2001 and are now one of the top holdings in the largest Frontier and Emerging Markets ETFs (FM). 

OMV Petrom (BVB: SNP) Shares - Research and Ratings

  • Is SNP stock undervalued compared to its fair value, analyst forecasts, and price relative to the market? 
  • What is the analyst 12-month SNP shares price forecast? 
  • What are the expectations for SNP shares in terms of future growth? 
  • How has OMV Petrom stock performed over the past 5 years? 
  • Should you buy OMV Petrom shares or invest in ETFs with SNP representation

    

Understanding OMV Petrom (BVB: SNP) shares: A brief history 

In late 2004, Petrom was privatized by the Romanian state and sold to Austrian oil company OMV, which acquired of the previous SNP Petrom SA. It is one of the largest corporations in Romania and the largest oil and gas producer in Southeast Europe.   

The Company’s business activities are divided into 3 segments: Upstream, Downstream Oil, and Downstream Gas.    

  • In the Upstream segment, OMV Petrom SA is involved in onshore and offshore exploration activities and the production of crude oil and natural gas.  
  • In the Downstream Gas segment, it is active in the distribution of gas and electrical energy generation and distribution.  
  • In the Downstream Oil segment, the Company is engaged in the operation of a refinery, as well as retail and wholesale of petroleum and petroleum products in Romania, Moldova, Bulgaria, and Serbia.  

The Company operates through numerous subsidiaries, including OMV Petrom Marketing SRL, Petrom Moldova SRL, OMV Bulgaria OOD, OMV Serbija DOO, Petrom Aviation SA, OMV Petrom Gas SRL, Tasbulat Oil Corporation LLP, Kom Munai LLP, among others. 

SNP shares are distributed among 4 categories:  

  • OMV AKTIENGESELLSCHAFT – 51.1568 % 
  • Legal entities – 24.7578 % 
  • ROMANIAN STATE THROUGH MINISTRY OF ENERGY – 20.6980 % 
  • Individuals – 3.3873 % 

The top 3 shareholders own 73.33% of the company, while the top 5 shareholders are: 

  • OMV Aktiengesellschaft– 50.1% 
  • Government of Romania – 20.3% 
  • Franklin Templeton Investment Management Ltd. (Romania) – 3.93% 
  • The Vanguard Group, Inc. - 0.76% 
  • Norges Bank Investment Management - 0.61% 

SNP shares - Fundamental Analysis and Financial Ratings 

See the latest OMV PETROM S.A. (BVB: SNP) stock price analysis, including valuation, future growth, past performance, and more to help you make more informed investing decisions. 

Valuation 

Is SNP undervalued compared to its fair value, analyst forecasts, and its price relative to the market? 

  • SNP is good value based on its Price-To-Earnings Ratio (5.1x) compared to the peer average (14.2x) and to the European Oil and Gas industry average (5.1x). 
  • SNP is a good value based on its Price-To-Earnings Ratio (5.1x) compared to the estimated Fair Price-To-Earnings Ratio (6.4x). 
  • SNP (RON0.54) is trading above simplywall.st estimate of fair value (RON0.54).

Future Growth 

OMV Petrom's earnings is forecasted to decline at an annual rate of -5.4% and its revenue is expected to decline at -6.2% annually. EPS is expected to decline by 8.2%. Return on equity is forecast to be 10.2% in 3 years.

  • SNP's Earnings vs Savings Rate are forecast to decline over the next 3 years (-5.4% per year). 
  • SNP's Earnings vs Market are forecast to decline over the next 3 years (-5.4% per year). 
  • SNP's High Growth Earnings are forecast to decline over the next 3 years. 
  • SNP's Revenue vs Market is expected to decline over the next 3 years (-6.2% per year). 
  • SNP's High Growth Revenue is forecast to decline over the next 3 years -6.2% per year).  
  • SNP's Return on Equity is forecast to be low in 3 years time (10.2%).

Past Performance 

How has OMV Petrom performed over the past 5 years? 
OMV Petrom has been growing earnings at an average annual rate of 23.2%, while the Oil and Gas industry saw earnings growing at 23.5% annually. Revenues have been growing at an average rate of 21.8% per year. OMV Petrom's return on equity is 16.9%, and it has net margins of 13.7%.

  • SNP has high-quality earnings. 
  • SNP's current net profit margins (13.7%) are lower than last year (16.3%).  
  • SNP's earnings have grown significantly by 23.2% per year over the past 5 years.  
  • SNP's earnings growth over the past year (1%) is below its 5-year average (23.2% per year).  
  • SNP earnings growth over the past year (1%) did not outperformed the Oil and Gas industry's 16.5%. 
  • SNP's Return on Equity (16.9%) is considered low.  

Financial Health  

How is OMV Petrom's financial position?  
OMV Petrom has a total shareholder equity of RON39.1B and total debt of RON175.8M, which brings its debt-to-equity ratio to 0.4%. Its total assets and total liabilities are RON57.7B and RON18.6B respectively. OMV Petrom's EBIT is RON7.6B making its interest coverage ratio -14.5. It has cash and short-term investments of RON16.0B.

  • SNP's short-term assets (RON22.6B) exceed its short-term liabilities (RON 8.0B)  
  • SNP's short-term assets (RON 22.6B) exceed its long-term liabilities (RON 10.6B).  
  • SNP has more cash than its total debt. 
  • SNP's debt-to-equity ratio has reduced from 2.2% to 0.4% over the past 5 years. 
  • SNP's debt is well covered by operating cash flow (5700.5%). 
  • SNP earns more interest than it pays, so coverage of interest payments is not a concern.  

Dividend 

OMV Petrom is a dividend paying company with a current yield of 15.17% that is well covered by earnings. Dividend yield forecast in 3Y is 8.9%.

  • OMV Petrom's dividend payments have been volatile in the past 10 years. 
  • SNP's dividend payments have increased over the past 10 years. 
  • SNP's dividend (15.7%) is higher than the bottom 25% of dividend payers in the RO market (2.53%). 
  • SNP's dividend (15.7%) is in top 25% of dividend payers in the RO market (8.27%). 
  • With its reasonably low payout ratio (35.1%), OMV Petrom's dividend payments are well covered by earnings.
  • At its current cash payout ratio (84.3%), SNP's dividend payments are covered by cash flows. 

SNP Shares Price Forecast 

What is the analyst 12-month OMV Petrom shares price forecast, and do we have any statistical confidence in the consensus price target from analysts? 

SNP_Shares_Price_Forecast .png

Source: simplywall.st 

According to simplywall.st, the SNP 12-month target price is less than 20% higher than the current share price.

The analyst followed by stockopedia.com consensus target price for shares in OMV Petrom SA is RON0.57.  That is 14.46% above the last closing price of RON0.50.

Trading Economics forecast OMV Petrom shares to be priced at 0.53 RON by the end of this quarter and at 0.50 RON in one year, according to their global macro models projections and analysts’ expectations.

There are no 5-year SNP shares price forecasts and price predictions. 

Important: When considering OMV Petrom's fundamental analysis, financial rating and price predictions, it’s important to remember that high market volatility and changing economic environment makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their ratings and predictions wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose. 

OMV Petrom Shares - Technical Analysis  

From a technical perspective, OMV shares are moving on an uptrend that started at the beginning of 2023.  

top_10_bvb_snp.png

Although, price is retracing bulls seem to still be in control as main support level (previous resistance) 0.46 remains intact. Near term support level is 0.53. A rebound at this level may target new all-time highs.

How to Invest in OMV Petrom 

Some investors want to take an active hand in managing their investments, while others prefer to set it and forget it. Your preference may change but decide on an approach to get started. 

For most people, stock market investing means choosing among these two investment types: 

Individual OMV Petrom shares (BSE: SNP)  

If you’re after a specific company, you can buy a single share or a few shares to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes significant investment and research. 

If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day. 

Traditional stockbrokers allow you to invest in local stocks. However, you might not be able to invest in international stocks listed on the major stock exchanges, global ETFs, and other assets. 

 

Individual OMV AG (VIE: OMV) shares  

OMV AG is the leading oil and gas group in central Europe listed on the Vienna Stock Exchange (WBAG). Net sales break down by activity as follows: 
- refining and distribution of hydrocarbons (58.1%). At the end of 2021, the group had 3 refineries located in Austria, Germany and Romania, and 2,088 filling stations in Europe; 
- manufacturing of chemical products (26%): advanced polyolefins, base chemicals, fertilizers, and plastics; 
- exploration and production of oil and gas (15%): 486,000 barrels of crude oil and Liquefied Natural Gas (LNG) produced per day in 2021; 
- autres (0,9%). 

Net sales break down geographically as follows: Austria (11.9%), Germany (19%), Romania (9.9%), Norway (2.2%), Europe (47.5%), United Arab Emirates (1.8%), Russia (1.4%), New Zealand (1%) and other (5.3%). 

With CAPEX.com you can trade CFDs on OMV AG shares with low spread and zero commission. 

OMV_Group_stock_chart.jpg

ETFs with SNP holdings 

OMV Petrom (or any single stock, for that matter) can be a very volatile investment. You can manage the risk you see extreme highs and lows by diversifying your investment holdings. An ETF, for instance, contains a basket of individual stocks. When you invest in a fund, you also own small pieces of each of those companies. 

 

If you want an ETF with SNP representation, you might consider iShares MSCI Frontier and Select ETF. BlackRock's iShares is the largest provider of ETFs as calculated by assets under management. 

iShares MSCI Frontier and Select EM ETF_20230516165547.png
 

The fund can be suitable for Romania and foreign investors who want liquid and diversified exposure to another top 9 companies listed on the Bucharest Stock Exchange:

Banca Transilvania (BSE: TLV)
Romgaz (BSE: SNG)
BRD (BSE: BRD)
Transgaz (BSE: TGN)
Electrica (BSE: EL)
Teraplast (BSE: TRP)
MedLife (BSE: M)
Nuclearelectrica (BSE: SNN)
One United Properties (BSE: ONE)

 

Why invest in SNP Shares via FM? 

With net assets of almost $1B, The iShares MSCI Frontier and Select EM ETF (FM) is the largest exchange-traded-fund that seeks to track the investment results of an index composed primarily of frontier market equities along with select emerging market equities. 

  • Exposure to frontier market stocks and smaller size emerging market stocks with an emphasis on tradability and investability of the underlying constituents 
  • One-click access to a virtually untapped investment portfolio with a Bucharest Stock Exchange and BET index exposure. 
  • Use to seek long-term growth and diversification 

How to Get Started with CAPEX.com 

Here is how to buy and trade stocks, ETFs and other assets with an international, highly regulated broker like CAPEX.com: 

  • Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold shares, open an Invest account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account. 
  • Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity. 
  • Fund your account with fiat money. Before buying and trading stocks and ETFs, you need to fund your exchange account with U.S. dollars, Euros, or other currencies. 
  • Place your order. Click on the "Search" icon located in the left panel or by clicking on "ETFs" and then select the instrument, such as "iShares MSCI Frontier and Select EM ETF”.  

      

When trading stocks, the CFDs (contracts for difference) are stored in your account and are more liquid than the underlying asset.  

However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are margins you need to maintain; if you cannot cover reductions in values, your position might be closed, and you'll have to meet the loss no matter what subsequently happens to the underlying asset. 

With CAPEX, you can trade CFDs on +2.000 stocks and invest in +5.000 stocks and ETFs with ownership. 

Free resources 

Before you start investing in shares, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free trading courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a more informed trader. 

Our demo account is a great place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading. 

Sources:  

Investors | OMVPetrom.com 
OMV Petrom (BVB:SNP) - Stock Price, News & Analysis - Simply Wall St 
BVB - Actiuni SNP OMV PETROM S.A. 
OMV Petrom SA Share Price - BSE:SNP Stock Research | Stockopedia 
OMV Petrom | SNP - Stock Price | Live Quote | Historical Chart (tradingeconomics.com) 

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Cristian Cochintu
Cristian Cochintu
financial_writer

Cristian Cochintu writes about trading and investing for CAPEX.com. Cristian has more than 15 years of brokerage, freelance, and in-house experience writing for financial institutions and coaching financial writers.