Share Prices & Company Research

Market News

29 Apr 2020 | 13:06

Buy Energean for oil upswing, Berenberg says

(Sharecast News) - Buy Energean Oil & Gas in a strategy favouring quality companies for when the oil price starts to rise in the second half of 2020, Berenberg analysts recommended. Berenberg initiated coverage of Energean with a 'buy' rating and a price target of 910p. The broker also recommended buying Sweden's Lundin Energy and Kosmos Energy of the US.

The plunge in the price of oil has presented investors with a great opportunity, Berenberg said. If demand and confidence return in the second half of 2020 the companies that survive will outperform strongly, the broker said.

Investors must choose whether to back quality names for the long term or take a shorter-term bet on highly geared companies. There is too much uncertainty surrounding some of these companies and now is the time to focus on quality assets and balance sheets, Berenberg said.

"Now more than ever, stock selection is key, and positioning in those names that make it through will generate powerful outperformance," Berenberg's James Carmichael and colleagues wrote in a note.

Based on resilience to low oil prices, organic growth prospects and the reliability of asset bases, Energean and Lundin stand out while Kosmos has an attractive portfolio and a discount to NAV, Berenberg said.

"We initiate coverage of Energean which is building a diverse, gas-weighted production portfolio," Carmichael wrote. "In addition, contracted pricing insulates it from commodity price volatility, and the strong balance sheet will fund all planned capex."

Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.