Agrofert decided to step down from privatization, upgrading to hold

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Investiční bankovnictví KB

      Ministry of Finance announced that it will propose government to cancel privatization of Unipetrol. The announcement came after Agrofert agreed with the NPF to cancel the privatization contract.

      

       The Ministry of Finance thus confirmed market expectations, which were driving company’s share price for several months. However, we believe the market has already priced in these expectations, which significantly limits upside for the shares. Moreover, the investors will refocus on company’s fundamentals, which are not sound this year. Nevertheless, as Agrofert stepped down from the privatization the risks related with its entrance into Unipetrol, which led us to downgrade the stock to sell were eliminated. With the worsening fundamentals in mind, we are upgrading the stock to hold.

      

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