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PetroChina Trades at Fair Value
PetroChina (PTR - Analyst Report) reported high growth revenue in the first quarter of 2008 due to high crude oil prices and increased production. However, its earnings declined significantly over the same quarter in 2007 due to increased special earnings levies and government price controls of refined products.
Although PetroChina faces a number of challenges in executing its strategy, including high asset prices due to continued strength in commodity prices and intense global competition for upstream assets, the company is well-positioned to leverage the tremendous opportunities in China's market. Thus, we maintain our Hold rating for PetroChina.
Based on our estimate for fiscal year 2008 earnings per ADR, the company is trading at 11.3x, which is similar to the industry mean. Based on our estimate for fiscal year 2009 earnings per ADR, the company is trading at 10.7x, which is still similar to industry mean. We believe current valuation fairly represents its value. Our fiscal year 2009 earnings per ADR estimate yields a target price of $145.25, which we believe reflects the company's prospects.
Read the full analyst report on PTR
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| Market Summary | Jul 31, 2010 13:12 pm ET |
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