Are the Statoil Downgrades good or bad?Statoil recently being downgraded by several sources citing various problems. Think this could be good or bad for the deal-thinking good from the standpoint if they hit-some high netbacks with no fracing restrictions with huge potential or could it cause them to concentrate on their core business.and pull back from such risky ventures-hopefully they first well is in full play but we never hear much of anything unless it is required as material news and even then they seem to be light Statoil ASA (NYSE:STO) was downgraded by Zacks Investment Research from a “buy” rating to a “strong sell” rating in a report issued on Tuesday.
According to Zacks, “Though Statoil ASA is fairly active in its development operations, we remain apprehensive as the company’s production has been facing hiccups of late. The company’s financial flexibility is getting increasingly restricted. The currently weak commodity price environment adds to the woes. With crude prices anticipated to remain weak, the company’s revenues and earnings will likely remain stressed. Moreover, with major projects scheduled to be commissioned in coming years any project delays and capital spending deferrals may adversely affect company’s profitability. Therefore, we caution investors against this company at this point.”
A number of other equities analysts have also commented on STO. Scotiabank set a $17.00 target price on shares of Statoil ASA and gave the stock a “hold” rating in a research report on Monday, March 27th. Macquarie assumed coverage on shares of Statoil ASA in a research note on Friday, March 24th. They set an “underperform” rating on the stock. Finally, Goldman Sachs Group Inc reiterated a “sell” rating on shares of Statoil ASA in a research note on Tuesday, February 21st. Five investment analysts have rated the stock with a sell rating, three have given a hold rating and six have issued a buy rating to the company. Statoil ASA currently has a consensus rating of “Hold” and a consensus target price of $17.55.