FSUOGM: Rosneft surpasses Sberbank in market cap

Russia’s largest oil producer Rosneft surpassed the country’s largest bank Sberbank in market capitalisation during trading on the Moscow stock exchange (MOEX) on December 19, becoming Russia’s most valuable company, according to exchange data.

The recent climb in Rosneft’s value comes as the company’s crude exports have remained robust over the last two years despite international sanctions, thanks to Russia’s successful efforts to circumvent restrictions and reorientate volumes to the fast-growing markets of India and China.

By 21:05 Moscow time on December 19, Rosneft’s shares had risen 3.6% to RUB505.1 ($4.74) each, while Sberbank’s ordinary shares fell 0.3% to RUB229.5, and its preferred shares edged up 0.1% to RUB230.3. Rosneft’s market cap reached RUB5.35 trillion, exceeding Sberbank’s RUB5.18 trillion, which includes RUB4.95 trillion for ordinary shares and RUB230bn for preferred shares.

Rosneft’s market cap has since surged even higher, closing at RUB6.25 trillion on January 3, against Sberbank’s price of RUB5.83 trillion. Rosneft's ascent places it ahead of Russia’s Lukoil, with a market valuation of RUB4.63 trillion, followed by Gazprom Neft at RUB3.1 trillion and Gazprom at RUB3.02 trillion. The latter’s value has tanked as a result of the loss of most of its gas market share in Europe over the past two years, resulting in its part-owned subsidiary Gazprom Neft overtaking it in value in 2023.

Rosneft’s shares have been on an upward trajectory since November 21, gaining 32% since then from RUB446.8. Sberbank, previously Russia’s largest company by market value since November 2016, has alternated leadership with Rosneft and Gazprom over the years.

Alfa-Bank analysts recently included Rosneft shares among their top investment picks for 2025, citing the company’s "exceptional operational efficiency" and its position as the only clear growth story in Russia's oil market. They praised Rosneft’s cost-cutting measures and high-margin projects, forecasting stable EBITDA profitability of up to 35% as oil prices recover and new projects come online.

The flagship Vostok Oil project in the Russian Arctic, set to deliver its first shipment in 2026, is a significant factor underpinning this optimism. The mega-development is slated to produce as much as 2mn barrels per day (bpd) at peak capacity sometime in the late 2030s, which is equivalent to around a fifth of Russia’s current output.

Alfa-Bank predicts Rosneft's shares could reach a target price of RUB645 this year and rates the stock as "Outperform,” according to the Moscow-based Vedomosti newspaper. Other forecasts are even more bullish. PSB projects a rise to RUB661 within the next 12 months, while BCS Global Markets estimates a potential jump to RUB730, the newspaper reported on December 19.

Valery Andrianov, an expert at the Financial University under the Russian government, speaking to Vedomosti, attributed Rosneft's growth to its long-term strategy of strengthening production and financial stability, alongside its focus on cost optimisation. He noted that despite OPEC+ constraints and higher taxes, the company maintained robust financial performance for the first nine months of last year.

Sergey Suverov, an investment strategist at Aricapital, highlighted Rosneft's stable financial results, predictable dividend policy, and transparent business model as key factors behind its stock performance. Maxim Khudalov of Vector Capital added that expectations of high oil prices in 2025, driven by sustained inflationary pressures in the US, could further boost Rosneft’s EBITDA.

Independent industrial analyst Maxim Shaposhnikov described Rosneft’s shares as "fundamentally undervalued," predicting a price range of RUB650-750, an increase of 28.6-48.5%. Suverov estimates potential growth at 20-30%, underscoring Rosneft’s strong position in Russia’s oil and gas sector.

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