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UPDATE: SEB Enskilda Downgrades Statoil ASA to Sell on Poor Cash Flow, Limited Growth

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SEB Enskilda reduced its rating on Statoil ASA (NYSE: STO) from Hold to Sell.

SEB Enskilda said, "We have downgraded our recommendation on Statoil from Hold to Sell as we expect only limited earnings growth and deteriorating cash flow over the next two years. Although Statoil is building for post-2015 growth we do not think the stock market will be patient enough to wait for the “good years”. Statoil's free cash flow and production growth look feeble compared with peers over the next few years. Although gearing currently is very low, we expect a sharp increase to fund capex and dividends – this gearing is also very sensitive to changes in the oil price."

Statoil ASA closed at $24.65 on Friday.

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