16 October 12 10:42–Harel Finance analyst Elad Kraus today cut his recommendation for the oil and gas exploration sector from “Overweight” to “Market weight”, due to the latest rise in prices of shares and the closing of the discount.
“We estimate that the sector’s positive point in the near term will be the entry of a partner into Leviathan. However, approval of the Tzemach Committee recommendations is liable to be delayed, and the recommendations could even changed for the worse, following the failure of the latest wells, which reduce the domestic supply of gas,” says Kraus.
Kraus’s stock pick in the gas sector is Delek Group Ltd. (TASE: DLEKG). He cites the company’s relatively high discount compared with the sector, taking into account the leverage level of the company, which has a solo level of 52%.
Kraus gives Delek Group subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) a target price of NIS 2.28 and Delek Drilling LP (TASE: DEDR.L) a target price of NIS 13. He gives their Tamar partner Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) a target price of NIS 0.54, and their Leviathan partner Ratio Oil Exploration (1992) LP (TASE:RATI.L) a target price of NIS 0.35. He gives Delek Group a target price of NIS 919, compared with its market price of NIS 710, a discount of 29%. Delek Group is the only company with an “Outperform” recommendation; all the other companies have a “Market perform” recommendation…Read More>>