Morgan Stanley downgraded BP (BP) to Underweight from Equal Weight with a price target of $26.50, down from $29.40. The firm adjusted ratings in the European energy group, saying the sector’s “fortunes remain closely tied to oil markets.” Morgan Stanley expects oil to enter a “meaningful surplus” after the summer. As such, it foresees downside risk to earnings and buybacks, upside risk to net debt, and does not find valuations compelling at current share levels. The firm took its industry view back to “Cautious.” BP’s elevated balance sheet gearing leaves it more sensitive to changes in macro conditions, contends Morgan Stanley.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
Read More on BP:
- BP call volume above normal and directionally bullish
- BP Stock Gushes Higher as Oil Rivals Get Set to Swoop in Takeover Tussle
- BP rivals run the numbers, debate on takeover, FT reports
- BP-Shell deal would create European rival to Exxon, Chevron, Bloomberg says
- BP price target lowered to 420 GBp from 480 GBp at JPMorgan