UPDATE: Deutsche Bank Downgrades Statoil to Hold on Relative Valuation

Deutsche Bank reduced its rating on Statoil STO from Buy to Hold and stated the stock is relatively expensive compared to its sector peers. Deutsche Bank commented, "Solid results at the operating level, albeit again highlighting the challenges of accurately modelling the quarterly financial impact of rapid growth in the international business. Statoil is not an expensive stock (38% discount to NAV), but trading at 8.7x 2013e PE neither is it cheap relative to a sector on 7.5x. With a period of exceptionally strong production momentum drawing to a close before accelerating in 2015, we worry that material incremental exploration success is required to prevent the relative rating coming under pressure. Achievable given an active "high-impact" drilling programme, but suggestive to us that share price risk is increasing." Statoil closed at $24.28 on Monday.
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