Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Equinor Downgraded: Analyst Highlights Faster Balance Sheet Re-leveraging And Modest 2024 Distributions

Published 19/12/2023, 19:32
Updated 19/12/2023, 20:40
© Reuters.  Equinor Downgraded: Analyst Highlights Faster Balance Sheet Re-leveraging And Modest 2024 Distributions

Benzinga - by Lekha Gupta, Benzinga Editor.

RBC Capital Markets analyst Biraj Borkhataria downgraded Equinor ASA (NYSE: EQNR) to Sector Perform from Outperform and cut the price target to NOK390 from NOK350.

The analyst says that EQNR looks set to re-lever its balance sheet faster than expected, suggesting more modest than anticipated 2024 distributions amid a subdued macro outlook and a lower commodity deck.

Also Read: Energy Giant Equinor's Q3 Earnings: Revenue & Profits Tumble Significantly On Weak Gas Production

Notably, Borkhataria updated the oil deck to $82.5/bbl Brent in 2024 (vs. $90/bbl earlier).

Also, the analyst expects potential negative earnings revisions for the company.

As per the analyst's updated oil deck estimates, Equinor will offer a single-digit FCF yield, with further pressure into 2025 due to lagged tax payments.

Also Read: Energy Sector Stocks Flush With Cash Amid Oil's Bear Market: Is There A Buy Signal In Sight?

Borkhataria expects shareholder distribution to step down, projecting ~$13.3 billion in 2024, reflecting a smaller special dividend and a share buyback of $5 billion (vs. $6 billion this year).

Consequently, the analyst estimates EBIT of $33.5 billion for FY24 and $29.4 billion for FY25, both around 10% below consensus.

Also Read: Equinor's Massive Gas Pact: Long-Term Deal With Germany's SEFE, Plus Hydrogen Partnership

Price Action: EQNR shares are trading lower by 0.49% at $31.56 on the last check Tuesday.

Photo via Company

Latest Ratings for EQNR

Mar 2022B of A SecuritiesUpgradesNeutralBuy
Feb 2022HSBCUpgradesHoldBuy
Jan 2022B of A SecuritiesDowngradesBuyNeutral
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

View the Latest Analyst Ratings

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.