Mol Records Biggest Four-Day Rally in Six Years on Upgrades

Mol Nyrt. posted the biggest four-day rally since May 2009 as analysts raised their outlook on anticipation of rising refinery revenue and a more favorable tax environment.

The shares of Hungary’s largest refiner jumped 4.6 percent to 13,900 forint by close in Budapest, extending the gains in the past four days to 15 percent. About 721,000 shares were traded, almost seven times the three-month daily average.

The stock has rallied almost 16 percent in the past month, the best performance among 16 eastern European peers tracked by Bloomberg. That was helped by a rebound in the oil market and price-target upgrades by HSBC Bank Plc and Erste Group Bank AG. Analysts at both companies have a buy recommendation on the stock, citing bets for higher profitability in the company’s refining business.

“Mol’s earnings will hit the roof in 2015 and 2016,” Tamas Pletser, a Budapest-based analyst at Erste, wrote in an e-mailed report on Wednesday.

Mol, which had its biggest quarterly loss in more than five years at the end of 2014, will face a quick improvement in its fundamentals, Pletser said.

Soaring refining and petrochemical margins will more than offset declining oil production, Pletser said, raising his 12-month price target by 46 percent to 17,400 forint on Wednesday.

BUX Rally

Mol is the latest stock to benefit from an increase in investor demand for Hungarian equities that has raised the benchmark BUX index by 25 percent this year, the fifth-best performance among 93 primary indexes tracked by Bloomberg.

OTP Bank Nyrt., the country’s largest lender, has rallied 40 percent since the beginning of the year, helped by the government’s pledge to reduce a special tax on banks. Magyar Telekom Nyrt., the local unit of Deutsche Telekom AG, has surged 25 percent on a cabinet promise to review a levy on telecommunication companies. Mol is subject to a similar industry-specific tax on energy companies.

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