Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

HELLENiQ ENERGY Holdings S.A. / Equity Bottom-Up

In May, Hellenic Petroleum, a leading oil refiner in Greece, presented its updated strategy (Vision 2025) with a focus on a low-carbon future. It involves accelerating the energy transition towards renewable energy sources (RES) and upgrading Hellenic’s core refining operations aimed at a significant reduction in CO2 (50% by 2030, including both a reduction in emissions and offset through RES). New ESG objectives and corporate restructuring are included. In this report, we present an overview of the new strategy; our forecasts and valuation are still based on the current shape of the company pending more information on the transition. Our valuation is down 3% to €6.73/share, reflecting peer group multiples and uncertain market conditions, nonetheless implying 16% potential upside.

In May, Hellenic Petroleum, a leading oil refiner in Greece, presented its updated strategy (Vision 2025) with a focus on a low-carbon future. It involves accelerating the energy transition towards renewable energy sources (RES) and upgrading Hellenic’s core refining operations aimed at a significant reduction in CO2 (50% by 2030, including both a reduction in emissions and offset through RES). New ESG objectives and corporate restructuring are included. In this report, we present an overview of the new strategy; our forecasts and valuation are still based on the current shape of the company pending more information on the transition. Our valuation is down 3% to €6.73/share, reflecting peer group multiples and uncertain market conditions, nonetheless implying 16% potential upside. 

Hellenic Petroleum - Introduction to decarbonisation plans

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

We highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our overall constructive outlook. Last week we noted Europe’s STOXX 500 was on the cusp of a breakout above 4040; we got the breakout. WTI and Brent crude oil also broke above key multi-year resistance at $67 and $70, respectively. The MSCI ACWI, ACWI ex-US, and EAFE indexes each hit new all-time highs and remain in uptrends. The MSCI Emerging Markets index (EEM-US) bullishly inflected above short-term resistance at $55.35 and RS is reversing the downtrend. These are all bullish signals for global equities, and our constructive outlook remains appropriate.

We highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our overall constructive outlook. Last week we noted Europe’s STOXX 500 was on the cusp of a breakout above 4040; we got the breakout. WTI and Brent crude oil also broke above key multi-year resistance at $67 and $70, respectively. The MSCI ACWI, ACWI ex-US, and EAFE indexes each hit new all-time highs and remain in uptrends. The MSCI Emerging Markets index (EEM-US) bullishly inflected above short-term resistance at $55.35 and RS is reversing the downtrend. These are all bullish signals for global equities, and our constructive outlook remains appropriate.

Major Breakouts For WTI and Brent Crude Oil. Actionable Themes: Energy, Manufacturing, Autos/Parts

Hellenic Petroleum has presented its updated strategy, which involves accelerating the energy transition aimed at a significant reduction in CO2 emissions and spending up to €2bn on clean-energy projects by 2030 to drastically decarbonise its activities. Q121 results were negatively affected by lower domestic oil demand amid the COVID-19 pandemic-driven lockdown. We expect Hellenic will benefit from an increase in demand for transport fuels as the restrictions are gradually lifted in Q221 and with Greece opening for tourists in May. We have updated our estimates to reflect Q121 results. Our valuation is up 6% to €6.91/share, implying a 10% potential upside, as we move to FY22e peer group multiples.

Hellenic Petroleum has presented its updated strategy, which involves accelerating the energy transition aimed at a significant reduction in CO2 emissions and spending up to €2bn on clean-energy projects by 2030 to drastically decarbonise its activities. Q121 results were negatively affected by lower domestic oil demand amid the COVID-19 pandemic-driven lockdown. We expect Hellenic will benefit from an increase in demand for transport fuels as the restrictions are gradually lifted in Q221 and with Greece opening for tourists in May. We have updated our estimates to reflect Q121 results. Our valuation is up 6% to €6.91/share, implying a 10% potential upside, as we move to FY22e peer group multiples.

Hellenic Petroleum - On the path towards decarbonisation

Hellenic Petroleum experienced a weaker Q220 due to record-low benchmark margins. As a consequence of the unprecedented impacts of COVID-19, demand for global crude oil and oil products collapsed. As lockdown measures were imposed across Europe, lower economic activity severely affected travel and tourism markets in countries like Greece. Despite the current headwinds the industry is facing, Hellenic maintained a strong operating performance and was capable of minimising the impacts of COVID-19. This was possible due to its storage capacity and the flexibility of its refining system. We have updated our estimates and valuation to reflect Q220 results and the impact of COVID-19. Our updated valuation is down 3% to €6.81/share.

Hellenic Petroleum experienced a weaker Q220 due to record-low benchmark margins. As a consequence of the unprecedented impacts of COVID-19, demand for global crude oil and oil products collapsed. As lockdown measures were imposed across Europe, lower economic activity severely affected travel and tourism markets in countries like Greece. Despite the current headwinds the industry is facing, Hellenic maintained a strong operating performance and was capable of minimising the impacts of COVID-19. This was possible due to its storage capacity and the flexibility of its refining system. We have updated our estimates and valuation to reflect Q220 results and the impact of COVID-19. Our updated valuation is down 3% to €6.81/share.

Hellenic Petroleum - Overcoming unprecedented uncertainties

Hellenic Petroleum (ELPE) reported that Q120 production was 8% higher than Q119 while adjusted EBITDA increased 4% to €128m. Lower oil prices in the quarter led to improving margins; however, as the COVID-19 pandemic started to affect global demand for oil products, margins began to come under pressure. We expect this pressure will continue for the next three to six months as economies around the world slowly recover and lockdown measures begin to ease. Hellenic’s high complexity index and large storage capacity allow for flexibility in times of uncertainty and given the company’s healthy balance sheet, we expect it to weather this period. Our updated valuation is down 5% to €7.00/share to reflect the current industry headwinds and lower global oil demand.

Hellenic Petroleum (ELPE) reported that Q120 production was 8% higher than Q119 while adjusted EBITDA increased 4% to €128m. Lower oil prices in the quarter led to improving margins; however, as the COVID-19 pandemic started to affect global demand for oil products, margins began to come under pressure. We expect this pressure will continue for the next three to six months as economies around the world slowly recover and lockdown measures begin to ease. Hellenic’s high complexity index and large storage capacity allow for flexibility in times of uncertainty and given the company’s healthy balance sheet, we expect it to weather this period. Our updated valuation is down 5% to €7.00/share to reflect the current industry headwinds and lower global oil demand.

Hellenic Petroleum - Positive Q120 results despite market conditions

Greece

HELLENiQ ENERGY Holdings S.A. explores for, develops, produces, refines, and markets petroleum products.  The Company also produces petrochemicals and chemicals, and explores for and produces hydrocarbons.  It constructs and operates pipelines. The Company also offers engineering services.  HELLENiQ ENERGY Holdings S.A. operates refineries in Thessaloniki, the Athens metropolitan area, and Skopje.

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HELLENiQ ENERGY Holdings S.A. (ELPE GA)

Hellenic Petroleum - Introduction to decarbonisation plans

In May, Hellenic Petroleum, a leading oil refiner in Greece, presented its updated strategy (Vision 2025) with a focus on a low-carbon future. It...

Edison Investment Research

Major Breakouts For WTI and Brent Crude Oil. Actionable Themes: Energy, Manufacturing, Autos/Parts

Today we highlight several positive developments that have occurred since last week’s Int’l Compass report, all of which continue to support our...

Vermilion Research

Hellenic Petroleum - On the path towards decarbonisation

Hellenic Petroleum has presented its updated strategy, which involves accelerating the energy transition aimed at a significant reduction in CO2...

Edison Investment Research

Hellenic Petroleum - Overcoming unprecedented uncertainties

Hellenic Petroleum experienced a weaker Q220 due to record-low benchmark margins. As a consequence of the unprecedented impacts of COVID-19, demand...

Edison Investment Research

Hellenic Petroleum - Positive Q120 results despite market conditions

Hellenic Petroleum (ELPE) reported that Q120 production was 8% higher than Q119 while adjusted EBITDA increased 4% to €128m. Lower oil prices in...

Edison Investment Research

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