Guideline for the Moscow Exchange index: 3650-3700 points


Market the day before

Trading dynamics were mixed. The growth leaders among the most liquid instruments were shares of Aeroflot (AFLT 70.56, + 4.81%) on the back of news about an increase in passenger traffic. M.video securities (MVID 650.5, -6.67%) turned out to be outsiders due to the closure of the register of shareholders to receive dividends. The USD / RUB pair dropped below 74.

Market and company news

MTS (MTSS 326.95, + 0.45%) will report for the first quarter. According to the consensus, revenue will amount to RUB 123 billion, OIBDA – RUB 53 billion, profit – RUB 14 billion. At the end of the year, sales may reach 520 billion rubles. (+ 5% YoY), OIBDA – RUB 225 bln. (with a margin of 43%), profit – 60–65 billion rubles. The paper, in our opinion, should be considered as a protective one, but with a high growth potential. Our target is on the horizon of the year – 390 rubles. per share.

Alrosa (ALRS 112.59, -1.24%) is to publish quarterly results. According to the expectations of the investment community, the revenue will amount to 89.9 billion rubles. ($ 1.2 billion based on sales data), EBITDA – 38 billion rubles, profit – 24 billion rubles. At the end of the year, the sales volume may reach 273 billion rubles. (+ 23% YoY), EBITDA – RUB 125 bln. (with a margin of 46%), profit – 78 billion rubles. These forecasts are driven by the overall recovery in the diamond market, with sales of 15.5 million carats in the first quarter, while production was 7.5 million carats. Our target price for Alrosa shares on the horizon is RUB 127. for the paper.

Trading Ideas

Mail.ru (MAIL 1 503.0, -0.88%), spec. purchase, purpose: 1800 rubles. We believe that the negative as a whole has been played out. Fundamental factors do not correspond to the decline in quotations by 37% in eight months and 12% in a year. Stocks are declining amid negative performance by high-tech companies in the US, but Russian IT giants have never been as overvalued in terms of profit and book value as their foreign counterparts.

Expectations

We expect mixed dynamics. Forecast for the USD / RUB pair: range 73.00–74.00. The reference point for the Moscow Exchange index: 3650-3700 points.

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