UPDATE: Deutsche Bank Upgrades Statoil
In a report published Friday, Deutsche Bank analyst Mark Bloomfield upgraded Statoil ASA (NYSE: STO) to Buy from Hold, raising its price target to NOK170 from NOK150.
According to the report, Statoil stands out relative to the majors with the greatest bias to upstream and attractive reinvestment returns versus peer.
“We see scope for a 65% ‘value uplift' by 1/1/19 (40% NAV accretion, 25% yield). Trading at a 7% discount to peers on 1/1/14 P/NAV this appears underappreciated,” the report noted. “Not only this, but Statoil offers investors twice the leverage to exploration as its Major peers. This is a long-term value call, but with 2014 set to see 6 field start-ups to drive the next wave of growth and with frontier exploration offshore Angola, we see sufficient momentum to upgrade to Buy with a 12 month view.”
STO closed Thursday at $25.01.
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