(News Bulletin 247) – Jefferies is downgrading its advice from ‘buy’ to ‘hold’ on Repsol, with a price target reduced by 26% to 14 euros, expecting low refining margins, which would reduce the capacity of the Spanish group to surprise on distribution to shareholders.
The broker is adjusting its estimates for the oil and gas company to reflect a tougher macro environment and the valuation effects of the Sinopec deal, and believes Repsol should continue to struggle to outperform.
Jefferies now shows a preference in the universe of mid-caps for names that he considers better placed to benefit from a recovery in oil prices in the second half, mentioning the Portuguese Galp and the Italian Eni.
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