RAPORT ANALIST August 14, 2016

Still kicking. Despite all, the net is resilient above RON 1b

Valuation We update our view on Romgaz with a BUY recommendation and a target price of RON 27.06 per share revealing an upside potential of 18% against last close. We used a DCF model with a 5-year explicitly forecasted period after which a terminal free cash flow with a perpetual growth of -1% was employed. We reduced our previous target price (RON 30.09/share) mainly on lower-thaninitially estimated sales volumes and on increased CAPEX over 2017-2019 period to contain the development of the new thermal power plant, a project estimated at a cost of EUR 280m. We decreased our FY’16 net estimate from RON 1,275m to RON 1,070m