OMV Falls After SocGen Says Strategy May Be Risky: Vienna Mover
Shares declined 2.2 percent to 23.58 euros at the 5:30 p.m. close of trading in the Austria capital, erasing its July 13 increase.
“OMV is attempting to do what Repsol did a few years ago –- to turn a mostly downstream company, into a mostly upstream company,” Irene Himona and Mehdi Ennebati, analysts at SocGen, wrote in a note to customers. “That requires both downstream asset sales, which in Europe could be tough to undertake at acceptable prices, and upstream acquisitions.”
“With risks surrounding both parts of the strategy,” the analysts cut their rating for OMV to hold from buy, and reduced their price estimate for the stock to 25 euros from 34 euros.
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