Bloomberg News

CEZ Jumps Most in 15 Months as Raiffeisen Says Buy: Prague Mover

March 28, 2013

CEZ AS (CEZ), the biggest Czech utility, jumped the most in 15 months after Raiffeisen Bank International AG recommended buying the shares on anticipation the company will increase its profit target.

The stock climbed as much as 4 percent, the biggest intraday advance since December 2011. It traded 2.6 percent higher at 590.1 koruna by 4:24 p.m. in Prague, the biggest gain today in the PX (PX) index. CEZ closed at 564 koruna on March 19, the lowest since August 2005 as German power prices reached record lows.

Raiffeisen raised CEZ to buy from hold in a report dated yesterday, citing its increased forecasts for 2013 earnings after the company said earlier this month it signed a deal with Czech Coal AS to fuel its Pocerady power station and agreed to sell its Chvaletice plant to Litvinovska Uhelna AS. The Austrian bank kept its 670 koruna price estimate for the shares.

“We believe that the company-specific news flow provides upside to current prices,” Teresa Schinwald, a Vienna-based analyst at Raiffeisen, wrote in the note. “We expect CEZ to raise its full-year 2013 guidance to levels above the current consensus on occasion of the first-quarter results on May 9.”

Power for next-year delivery in Germany, where CEZ exports part of its output, has increased 2.3 percent this week to 41.75 euros a megawatt-hour, rebounding from a record low of 40.25 euros reached on March 19. Low electricity prices may hurt the company’s earnings in 2014, Chief Financial Officer Martin Novak said in a Feb. 1 interview with Bloomberg News.

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

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net


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