Analyst: Energy Firm's Weak Q3/19 'Could Offer Attractive Buying Opportunity'

In an Oct. 18 research note, analyst Tom Erik Kristiansen reported that Pareto Securities expects Equinor ASA (EQNR:NYSE; EQNR:Oslo) to report a weak Q3/19, but that "could offer an attractive buying opportunity ahead of Sverdrup production impacting reported earnings and with European gas prices also being a recent positive (up 20% month over month)."

Kristiansen noted the indicators that Equinor will post a dampened Q3/19 even if it were to decrease its 2019 capex. For one, the company's Norwegian natural gas production was down in September more than 30% from the average.

Two, prices continued to be low.

Three, output expectations for its international business in Q3/19 also are reduced. "We estimate adjusted EBIT of US$2.5 billion, 6% below consensus," the analyst noted.

Kristiansen concluded with, "We have not changed our long-term positive view on Equinor." Thus, Pareto has a Buy rating and an NOK210 per share price target on the energy company.

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Disclosures from Pareto Securities AS, Equinor, October 18, 2019

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