Citi downgrades YPF on ‘much more balanced’ risk/reward

Citi downgraded YPF to Neutral from Buy with a price target of $24, up from $20. Today appears to be more challenging for Argentina oil and gas names relative to a few months ago, the analyst tells investors in a research note. The firm now sees an international scenario that may have a lower risk appetite given a more hawkish Federal Reserve than in January when it upgraded YPF to Buy. Citi’s base case would need higher price assumptions or better mid-term production visibility to accelerate monetization of the company’s existing resource base, the analyst tells investors in a research note. It thinks YPF’s risk/reward has become “much more balanced” than some months ago and downgrades the stock following the 18% year-to-date rally.