CEZ AS, the biggest Czech utility, jumped the most in more than four months after Raiffeisen Bank International AG recommended buying the shares on anticipation the company will increase its profit target.
The stock, the best performer in the PX index today, rose 2.4 percent to 588.5 koruna, its steepest gain since Nov. 23 and the highest close in two weeks. CEZ finished the day on March 19 at 564 koruna, the lowest since August 2005 as German power prices reached record lows that day.
Raiffeisen raised CEZ to buy from hold in a report dated yesterday, citing its increased forecasts for 2013 earnings after the company said earlier this month it signed a deal with Czech Coal AS to fuel its Pocerady power station and agreed to sell its Chvaletice plant to Litvinovska Uhelna AS. The Austrian bank kept its 670 koruna price estimate for the shares.
“We believe that the company-specific news flow provides upside to current prices,” Teresa Schinwald, a Vienna-based analyst at Raiffeisen, wrote in the note. “We expect CEZ to raise its full-year 2013 guidance to levels above the current consensus on occasion of the first-quarter results on May 9.”
Power for next-year delivery in Germany, where CEZ exports part of its output, has increased 2 percent this week to 41.60 euros a megawatt-hour, rebounding from a record low of 40.25 euros on March 19. Low electricity prices may hurt the company’s earnings in 2014, Chief Financial Officer Martin Novak said in a Feb. 1 interview with Bloomberg News.