In a report released yesterday, James Carmichael from Berenberg Bank downgraded Equinor ASA (0M2Z – Research Report) to a Hold, with a price target of NOK275.00.
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James Carmichael has given his Hold rating due to a combination of factors affecting Equinor ASA’s financial outlook. A significant concern is the anticipated increase in the company’s leverage, particularly if the Empire Wind 1 project is cancelled. This cancellation could lead to a substantial rise in net debt, which is expected to more than double, impacting Equinor’s financial stability.
Additionally, while Equinor’s dividend yield remains solid and slightly above the sector average, the outlook for share buybacks has been reduced. The revised buyback estimates are lower than the consensus, indicating a conservative approach to managing the balance sheet. These factors, along with updated forecasts that show a reduction in EBITDA and EPS projections, contribute to the decision to downgrade the stock from Buy to Hold.
In another report released on May 12, Morgan Stanley also downgraded the stock to a Hold with a NOK250.00 price target.