Feb. 2 (Bloomberg) -- Naftna Industrija Srbije AD, an oil company controlled by OAO Gazprom Neft, jumped the most since August 2011 after Wood & Co. recommended buying the stock, citing “cheap” valuation relative to peers and growing output.

NIS climbed 6 percent to 614 dinar at the close in Belgrade, the highest level since Dec. 22. Share turnover was more than three times the three-month daily average.

Wood initiated its coverage of NIS with a 12-month price estimate of 972 dinar, or 68 percent above yesterday’s close, in a report from Prague-based analyst Robert Rethy. The stock last traded at 3.8 times estimated earnings, compared with 5.5 times for Romania’s OMV Petrom SA, 7.8 times for Hungary’s Mol Nyrt. and 10 times for Croatia’s INA Industrija Nafte DD.

“NIS is producing about 30,000 barrels of oil equivalent per day, up 75 percent since Gazprom Neft took control over and brought in new technology, and speeded up drilling and development,” Rethy said. “A major discount to any regional peers” makes NIS “too cheap to ignore,” he wrote.

--Editors: Linda Shen, Ash Kumar

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net