The Russian company Rosneft was included in the list of the most preferable for investment according to one of the largest American investment banks Goldman Sachs. The bank recommends buying the company's shares, believing that they will grow by 41%.
One of the main growth factors for Goldman Sachs shares is the Vostok Oil project in the north of the Krasnoyarsk Territory.
“Given the global oil industry’s growing need for low-cost, low-carbon oil amid rising costs of capital and environmental regulations, the Bank believes that Rosneft provides an attractive long-term investment opportunity through the Vostok Oil project,” Goldman Sachs said in a report.
Analysts at Bank of America Merrill Lynch believe that the net present value of the Vostok Oil project could exceed $100-200 billion.
Previously J.P. Morgan and Bank of America Merrill Lynch also included Rosneft in the list of the most preferred companies for investment in 2022. At that time, analysts emphasized that the project was practically not taken into account in the assessment of the shares of the Russian company, although Vostok Oil has a high IRR, which is estimated at 54% in the base scenario.
In J.P. Morgan believe that Rosneft's dividend yield could reach 11-13% in 2022-2023. In addition, the company has one of the lowest unit production costs (approximately $2.6 per barrel).
Analysts at the investment bank VTB Capital note the high assessment of Rosneft due to the company's focus on the ESG agenda. The Russian company plans to achieve net carbon neutrality by 2050 by reducing greenhouse gas emissions, achieving zero routine flaring of associated petroleum gas and reducing the intensity of methane emissions to less than 0.2% by 2030, as well as the gradual transition of the company's own transport to low-carbon modes fuel.
It is worth noting that, according to Goldman Sachs reports, the top 15 Russian issuers have outperformed the largest European issuers (MSCI Europe index) and the largest emerging markets issuers in Europe, the Middle East and Africa (MSCI EM EMEA index) over the past 10 years.
“From an operational point of view, Russia is the most attractive investment market in the CEEMEA (Central and Eastern Europe, Middle East and Africa) region due to its financial strength and companies with strong management, high and constantly growing payments to shareholders,” analysts at the American bank say.
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