BA-CA issues “Buy” rating for VERBUND share

4/18/2005Wien

In its recently published research report, Bank Austria Creditanstalt has upgraded the VERBUND share from “Hold” to “Buy” and has raised the price target from € 165/share to € 230/share.

The investment bankers justify their decision on the basis that VERBUND operates in a profitable niche as one of the largest European hydropower producers and therefore displays above-average profitability compared to the sector as a whole.

VERBUND benefits from the positive development of the wholesale prices which has been triggered, above all, by the steady increase in prices for primary energy sources and deteriorating generation capacities combined with a growing demand for electricity in Europe. The low own generation costs and the promising investment in the Italian energy market are also important growth drivers.

Given that VERBUND is expected to generate healthy annual earnings growth, the share can now be classified as a growth share. Having assessed the potential of the VERBUND share, the investment bankers at BA-CA therefore conclude: “The only way is up, so buy.”