JP Morgan equity research analyst Elena Jouronova initiated coverage of LSR Group with a target price of US$19/GDR and a ‘Neutral’ recommendation.

Elena Jouronova says:

“We see significant upside potential for LSR stock that is reflected in our target price of US$ 19/GDR. Since the stock that demonstrated good post-IPO performance is currently priced higher than other sector peers on multiples basis we assign it our “Neutral” rating.

“Thanks to integrated business model combining real estate and building materials businesses we see LSR one of the safest choices in the sector today”.

Notes to Editors:

OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.

LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs over 15,000 people.

In 2005 and 2006, the revenues of LSR Group (according to IFRS statements) were US$ 463 million and US$ 777 million respectively. In 2007, the revenues amounted to US$ 1,403 million.

LSR Group has a B1 rating  from Moody’s Investors Service (outlook – Stable) assigned in July 2007 and confirmed on 30 May 2008 and a B+ rating by Fitch Ratings (outlook – Stable) assigned on 30 May 2008.

The Group’s shares are listed on MICEX and RTS and on the London Stock Exchange in the form of GDRs since its IPO in November 2007. 

In 2007, LSR Group was awarded ‘The Company of the Year’ National Award in the ‘Construction’ category.