[ET Net News Agency, 5 March 2020] BofA Global Research raised its target price for
United Company Rusal (00486) to HK$7 from HK$4.5 and maintained its "buy" rating.
The research house sees three reasons to buy Rusal (1) exposure to palladium (Pd) price
strength via Norilsk Nickel's dividends, (2) "green" (produced with hydropower) aluminium
angle and improving ESG (environment, social, and governance), and (3) growth in
value-added product (VAP) sales (+25% in 2021 versus 2019) and in aluminium output (+11%
in 2022 versus 2019).
BofA said the target price hike incorporates higher valuation of Norilsk Nickel stake
due to a higher Pd price forecast that is only slightly offset by 2% lower aluminium
price. (KL)