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On Friday, Jefferies resumed coverage of Newmed Energy LP (TLV:NWMD) shares, issuing a Hold rating and setting a price target of ILs13.30. The decision comes as the firm acknowledges the value of Newmed Energy’s significant interest in the Leviathan gas field, located offshore Israel.
The analyst at Jefferies highlighted the 45% stake Newmed Energy holds in the Leviathan gas field as a key investment attraction, warranting a premium valuation due to the size and certainty of the resource, along with the potential for substantial growth. The Leviathan gas field is one of the largest natural gas fields in the Mediterranean Sea and is a major contributor to Newmed Energy’s portfolio.
Despite the positive outlook on the company’s assets, the analyst noted that Newmed Energy’s current trading price exceeds the non-binding offer from bp/ADNOC made in 2023, which was ILs12.05. The analyst pointed out that Newmed Energy’s stock is trading at high multiples and shows a low discount to its net asset value (NAV), suggesting that the current valuation is more aligned with the market’s expectations.
The coverage reinstatement by Jefferies reflects a cautious stance, indicating that while the underlying assets are strong, the market has already priced in much of Newmed Energy’s growth prospects. The set price target of ILs13.30 is indicative of the analyst’s view that the stock is fairly valued at its current level.
Investors in Newmed Energy will likely monitor the company’s performance closely, particularly in relation to the development and output of the Leviathan gas field, as well as any changes in the market’s valuation of the company’s shares. The Hold rating suggests that Jefferies advises investors to maintain their current position in the stock without increasing or decreasing their holdings significantly.
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