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NT2 [O-PF +20%] - New floor price will have muted impact on 2016 earnings - Update

We slightly revise down our target price (TP) for NT2 by 2% but reiterate our O-PF rating as we believe that investors have overreacted to the impact of the new floor price on input gas, making the current valuation attractive. However, an expected fall in 2017 earnings due to a recovery in hydropower output makes us stop just short of rating it a BUY. We trim our forecasted 2016 earnings by 10% due to lower-than-expected volume in March and April.