Raiffeisen Bank said on Wednesday it raised its
recommendation onRomania's nuclear power plant operator Nuclearelectrica to 'buy' from 'reduce'and increasedits target price for the
stock.
The bank has set its12-month target price for Nuclearelectrica at
11 lei ($2.6/2.5euro) per share, up from the previous 7.85 lei per share,on
the back of the drop in risk free rates and higher earnings before interest,
taxes, depreciation and amortisation (EBITDA)margin assumptions,the local arm
ofAustrian banking group Raiffeisensaid in a statement.
"We consider
that the worst has passed for SNN [Nuclearelectrica] and 2015e looks
substantially brighter, ignoring impairments risk," the bank's analysts
added.
Raiffeisen Bank's analysts also said they believe power prices on
the competitive markethave hit bottom and are seen rising,
thoughNuclearelectrica would not benefit from this in the short term because it
hasalready contracted most of its estimated production for 2015.
The
growth in EBITDA in 2015should be driven by higher price on the regulated
market and lower operating expenses, the bank added.
Nuclearelectrica
operates the country's sole power plant located in Cernavoda, in southeastern
Romania. The power plant has two reactors with an installed capacity of 700
megawatts each, which cover around one-fifth of the country's electricity
needs.
Blue chip Nuclearelectrica was changing hands up 0.13% at 7.6 lei
by 1044CET.