OAO Gazprom climbed from a one-month low as JPMorgan Chase & Co. raised Russia’s natural gas export monopoly to the equivalent of buy, citing prospects for a Chinese deal and dividends.
The shares advanced 1.1 percent to 146.47 rubles by the close in Moscow, after falling 1.8 percent to the lowest level since Oct. 3 yesterday. Almost 64 million were traded, equal to about 1.4 times the stock’s three-month daily average.
JPMorgan raised Moscow-based Gazprom to overweight on the possibility of a gas contract with China and of switching to a dividend based on international reporting standards, according to an e-mailed note. The shares fell yesterday after Interfax reported Ukraine’s state-run energy company halted purchases from the natural-gas exporter. Gazprom’s global depositary receipts increased 0.1 percent to $8.85 by 2:57 p.m. in London.
“No other large-cap stock in Russia offers better potential to double over the next three years than Gazprom,” JPMorgan analysts led by Artem Konchin said in the note. “We see the company’s valuation as still undemanding, and its ability to generate cash remains intact.”
Gazprom trades at about 3.3 times estimated earnings, compared with a multiple of 4.2 for the Micex Index and 9.4 for Brazil’s Petroleo Brasileiro SA.