Although after an impressive 2022 TGN price suffered a correction, Transgaz stock (BVB: TGN) remained very popular among Romanian investors and top-performing international funds. While you can buy TGN shares directly, sometimes it is worth considering an ETF with TGN representation.
Transgaz is a state-owned company, which is the technical operator of the national natural gas transmission system in Romania. On 26 November 2007, Transgaz issued an IPO on the Bucharest Stock Exchange aiming to earn around US$84 million for developing on the local market and abroad but at the end of the IPO offer the company earned a total sum of US$2.52 billion making it the largest IPO on the Bucharest Stock Exchange. TGN is now one of the top holdings in the largest Frontier and Emerging Markets ETF.
Transgaz Stock (BVB: TGN) - Research and Ratings
- Is Transgaz stock undervalued compared to its fair value, analyst forecasts, and price relative to the market?
- What is the analyst's 12-month Transgaz stock price forecast?
- What are TGN’s future growth expectations?
- How has Transgaz stock performed over the past 5 years?
- Should you buy Transgaz shares or invest in ETFs with TGN representation?
Understanding Transgaz Stock (BVB: TGN): A brief history
Transgaz's core business is the transmission of natural gas and research and design in the field of natural gas transmission. More specifically, it is the monitoring, maintenance, and operation of transit pipelines and related technological installations.
The natural gas transport capacity is about 30 billion cubic meters per year and is provided by 11,840 km of pipeline and gas supply connections.
Transgaz is engaged in:
- The transit of natural gas, more specifically with the monitoring, maintenance, and operation of dedicated pipelines and technological facilities necessary for the transport of natural gas from the Russian Federation, pipelines that transit Romania through the Dobrogea area to the Balkan corridor.
- Research and development: Transgaz aims to increase the reliability and safety of the operation of the National Natural Gas Transmission System.
TGN shares are distributed among 3 categories:
- The Romanian state through the general secretariat of the Government – 58,5097%
- Legal Entities – 31,2045 %
- Individuals – 10,2858%
Transgaz stock - Fundamental Analysis and Financial Ratings
See the latest S.N.T.G.N. Transgaz (BVB: TGN) stock price analysis, including valuation, future growth, past performance, and more to help you make more informed investing decisions.
Valuation
Is Transgaz stock undervalued compared to its fair value, analyst forecasts, and price relative to the market?
- TGN is expensive based on its Price-To-Earnings Ratio (14.4x) compared to the peer average (10.6x).TGN is expensive based on its Price-To-Earnings Ratio (14.4x) compared to the Global Gas Utilities industry average (13.5x).TGN is expensive based on its Price-To-Earnings Ratio (14.4x) compared to the estimated Fair Price-To-Earnings Ratio (12.6x).
- TGN (RON18.74) is trading above simplywall.st estimate of fair value (RON6).
Future Growth
S.N.T.G.N. Transgaz's revenue is forecasted to decline at -6.8% per annum while its annual earnings is expected to grow at 27.5% per year. EPS is expected to grow by 27.5%. Return on equity is forecast to be 6.8% in 3 years.
- TGN's forecast earnings growth (27.5% per year) is above the savings rate (5.3%).
- TGN's earnings (27.5% per year) are forecast to grow faster than the RO market (-3.4% per year).
- TGN's earnings are expected to grow significantly over the next 3 years.
- TGN's revenue is expected to decline over the next 3 years (-6.8% per year).
- TGN's High Growth Revenue is forecast to decline over the next 3 years (-6.8% per year).
- TGN's Return on Equity is forecast to be low in 3 years' time (6.8%).
Past Performance
How has Transgaz stock performed over the past 5 years?
S.N.T.G.N. Transgaz's earnings have been declining at an average annual rate of -17.8%, while the Gas Utilities industry saw earnings growing at 11.4% annually. Revenues have been growing at an average rate of 4.5% per year. S.N.T.G.N. Transgaz's return on equity is 5.9%, and it has net margins of 9.6%.
- TGN has high-quality earnings.
- TGN's current net profit margins (9.6%) are higher than last year (8.5%).
- TGN's earnings have declined by 17.8% per year over the past 5 years.
- TGN's earnings growth over the past year (9.1%) exceeds its 5-year average (-17.8% per year).
- TGN's earnings growth over the past year (9.1%) exceeds exceeded the Gas Utilities industry (8.9%) .
- TGN's Return on Equity (5.9%) is considered low.
Financial Health
What is S.N.T.G.N. Transgaz's financial position?
S.N.T.G.N. Transgaz has a total shareholder equity of RON4.1B and total debt of RON2.1B, which brings its debt-to-equity ratio to 51.4%. Its total assets and total liabilities are RON8.0B and RON3.9B respectively. S.N.T.G.N. Transgaz's EBIT is RON112.5M making its interest coverage ratio 3.1. It has cash and short-term investments of RON368.7M.
- TGN's short-term assets (RON1.2B) exceed its short-term liabilities (RON891.1M).
- TGN's short-term assets (RON1.2B) do not cover its long-term liabilities (RON3.0B).
- TGN's net debt-to-equity ratio (42.4%) is considered high.
- TGN's debt-to-equity ratio has increased from 6.7% to 51.4% over the past 5 years.
- TGN's debt is well covered by operating cash flow (32.5%).
- TGN's interest payments on its debt are well covered by EBIT (3.1x coverage).
Dividend
S.N.T.G.N. Transgaz is a dividend paying company with a current yield of 0.23%, compared to the industry average yield (5.4%). TGN dividend yield forecast in 3Y is 5.0%.
- TGN's dividend (0.23%) isn’t notable compared to the bottom 25% of dividend payers in the Romanian market (2.53%).
- TGN's dividend (0.23%) is low compared to the top 25% of dividend payers in the RO market (8.27%).
Transgaz Stock Price Forecast
What is the analyst 12-month TGN shares price forecast, and do we have any statistical confidence in the consensus price target from analysts?
According to stokopedia.com, the analyst consensus target price for shares in Societatea Nationala de Transport Gaze Naturale Transgaz SA is 18.75 RON.
Investing.com analyst's 12-Month Price Target is 23.00 RON, while the Average and Low Price targets are 19.34, respectively 15.40 RON.
Source: investing.com
There are no 5-year TGN shares price forecasts and price predictions.
Important: When considering Transgaz'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.
Transgaz Stock (BVB: TGN) - Technical Analysis
Despite price`s major correction at the beginning of May, the mid-term uptrend remains intact as long as the main support level at 16.00 is valid.
A continuation of the bullish scenario involves a breakout above the 19.50 which is the next major resistance level.
How to Invest in Transgaz Stock (BSE: TGN)
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 Transgaz shares
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.
ETFs with TGN holdings
Transgaz stock (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 TGN 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.
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)
OMV Petrom (BSE: SNP)
Romgaz (BSE: SNG)
BRD (BSE: BRD)
Electrica (BSE: EL)
Teraplast (BSE: TRP)
MedLife (BSE: M)
Nuclearelectrica (BSE: SNN)
One United Properties (BSE: ONE)
Why invest in TGN 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:
Magistrala energiei | Transgaz
S.N.T.G.N. Transgaz (BVB:TGN) - Stock Price, News & Analysis - Simply Wall St
BVB - Actiuni TGN S.N.T.G.N. TRANSGAZ S.A.
Societatea Nationala de Transport Gaze Naturale Transgaz SA (TGN) Stock Forecast & Price Target - Investing.com
Societatea Nationala de Transport Gaze Naturale Transgaz SA Share Price - BSE: TGN Stock Research | Stockopedia