Wolterk
Marathon Oil (NYSE:MRO) and Chesapeake Energy (NASDAQ:CHK) on Thursday were downgraded to Neutral from a previous investment rating of Buy by analysts at financial-services company UBS. They included the rating changes in a preview report for 2024.
UBS forecasts that the price of West Texas Intermediate oil will recover to a range of $75 to $80 a barrel. The analysts also foresee “further consolidation improving capital efficiencies, and financial strength supporting shareholder returns above S&P 500 levels.”
The risks include “little growth, a lack of visible catalysts, valuation reflecting strip prices and potential for declining interest rates.”
Marathon Oil (MRO): UBS cut its price target for Marathon (MRO) to $28 a share from $34 a share, while also reducing its estimates for the company’s earnings before interest, taxes, depreciation and amortization next year and in 2025.
“The reduction reflects our lower 2024 crude oil and natural gas price outlook, risk for our FY25 crude oil and natural gas deck that’s 10% above Strip, and sector valuation moving lower,” according to UBS.
Chesapeake Energy (CHK): UBS cut its price target for Chesapeake (CHK) to $86 a share from $106 a share. The price of natural gas will affect the company’s performance.
“Our lower 2024 estimated natural gas deck, lower volumes, and lower valuation targets across the sector drive the reduced price target,” the bank said.
Conversely, UBS upgraded Coterra Energy (NYSE:CTRA) to Buy from a previous investment rating of Neutral, while cutting its price target to $31 a share from $33 a share.
Source link
