[ET Net News Agency, 11 June 2018] Jefferies Research raised its target price for
PetroChina (00857) to HK$9 from HK$8, and retained its "buy" rating.
The research house said the oil market is tight and supply side risks will drive prices
higher in 2018. It raised its per-barrel Brent price forecast to US$77 from US$64 in 2018;
to US$75 from US$60 in 2019; and to US$70 from US$65 in 2020. There is no change to its
long-term forecast of US$65.
Jefferies said, fundamentally, PetroChina is sitting on assets that the research house
has to struggle to discount (zeroing out refining, chemicals and marketing segment values)
to avoid coming up with an excessively high target price. At this point, shares should
appreciate almost as much as CNOOC (00883) with rising oil prices and continued
liberalization of natural gas prices.
Jefferies believes the IPO spin-off of the pipeline segment is a value crystallizing
eventuality. (KL)