Deputy Chief Executive Officer Alexander Medvedev, 51, said in a Moscow interview last year that Gazprom, which has a quarter of Europe's gas market, expects to be the world's biggest company and reach US$1 trillion in value as soon as 2014. The two Medvedevs aren't related.
"Gazprom's market value may well be US$1 trillion before Russia gets a new president," said Chris Weafer, chief strategist at Moscow-based UralSib Financial Corp. "Overtaking GE and China Mobile is not temporary."
All 16 analysts whose Gazprom recommendations are compiled by Bloomberg have a "buy" or equivalent recommendation on the stock. The average price estimate is US$19.66, or 34 percent more than Thursday's close. Exxon Mobil Corp., at US$469 billion, is the world's most valuable company, followed by PetroChina Co., China's largest oil producer, at US$446 billion.
The government this week approved a plan to allow natural-gas producers to charge 25 percent more for sales to households next year, 30 percent more in 2010 and 40 percent in 2011.
Russia's RTS Index is off to its worst start since 1998, when the government's US$40 billion default sent equities around the world tumbling. The 50 companies in the RTS, dominated by energy producers, through Wednesday traded at an average 9.52 times estimated earnings, the lowest among Europe's 10 biggest stock markets and a 29 percent discount to the MSCI Emerging Markets Index, according to data compiled by Bloomberg.
The combination of the quickest inflation in five years and a 45 percent increase in oil taxes spurred the benchmark RTS Index's 0.3 percent decline this year.
Russian stocks surged Thursday, with Lukoil and Rosneft rising the most in more than a year, after Putin said the country should cut taxes on the oil industry as production falls.
GE stunned investors on April 11 when CEO Jeffrey Immelt said 2008 earnings will fall short of his previous forecast and first-quarter profit dropped at four of its six biggest units. The world's largest maker of locomotives and jet engines retreated the most in 20 years that day.
Immelt blamed the results on weakening credit markets and their effect on the U.S. economy. GE on April 23 raised its cost-cutting goal by 50 percent and said it will sell underperforming units.
