Erste said the shares have a 6-month upside potential of 10% and 12-month potential of 86%, given the 15% price growth year-to-date.

The previous price target of 0.31lei/share has been lifted in light of a friendlier macroeconomic situation in Romania.

“We have lowered our estimates mainly due to the poor performance of the refining and marketing segment”, Erste said in the report. Analysts expect a net income of 1.47 billion lei for 2010, up slightly from 2009 and anticipate a profit margin of 10% for this year.

Erste predicts a return on equity of 9.95% this year and 7% increase in total debt to 2.72 billion lei.

“In the E&P segment we have come down with our estimates, reflecting our new oil price anticipation. We project the Brent crude oil price in 2010 to average $72 as opposed to a forecast of $75 previously. The result is a reduction in our EBIT estimates between 13% and 17% in the years 2010 to 2012”, Erste said.

Even though the oil & gas company posted net profit of 1.36 billion lei (€321 million) for 2009, up 34% from a year earlier, the board of Petrom will most likely fail to payout dividends this year, in an effort to sustain 2010 earmarks.

The company has a share capital of 5.66 billion lei, divided into 56.6 billion shares at a face value of 0.1lei.