MOSCOW, March 27 (RIA Novosti) - Bank of America Merrill Lynch Global Research has upgraded Gazprom OAO equities to a "buy" from a "neutral" rating.
Target price on the stock has also increased to $9.10 from $8.75. Bank of America's report explains that the West's reaction to the events in Ukraine has been quite limited to date. The US and EU have threatened more sanctions against Russia, including the energy sector if Russia escalates tensions in Ukraine. Bank of America stresses this is a highly unlikely option.
The bank also notes that since Gazprom stock has already discounted the losses on gas supplies to Ukraine, it allowed to upgrade equities' recommendation.
Russian energy giant on Wednesday said its annual financial plan and the volume of gas supplies transiting through Ukraine remain unaffected by the ongoing political crisis in Kiev.
The head of Gazprom's financial department, Andrei Kruglov, told reporters that the events in Ukraine, where a new government took power as a result of an illegitimate coup last month, "have not influenced the projected figures at all."
He also reassured Russian gas consumers in Europe that the company would fulfill all contractual obligations.
"All transit volumes are in line with contracts. We have seen no problems and I hope we won't see them in future," Kruglov said.
The US introduced sanctions targeting several Russian officials on March 17 and added more people to the blacklist on March 20. The sanctions impose visa bans and freeze any personal assets they may have in the US, as well as bar them from doing business with any US company or financial institution. Leaders of the G7 group of nations have threatened to introduce further sanctions should the conflict escalate.