UBS cuts Equinor as lower gas price is likely to hit returns

Bluenord ASA

17/01/2024 13:36

** UBS cuts Norwegian energy company Equinor  EQNR.OL  to
"sell" from "neutral" as it expects earnings and shareholder
returns to drop this year
    ** It sees material downside risk to 2024 consensus
expectations, saying that lower European gas prices are likely
to weigh on Equinor's results and shareholder distribution
    ** The brokerage notes that Equinor is the most sensitive to
gas prices among European integrated energy companies
    ** UBS expects the group's shares to come under pressure,
pointing out that last year the stock price was supported by the
$17 billion shareholder returns, which are seen to decrease to
$12 billion for 2024
    ** On top of that, the brokerage forecasts Equinor's shift
towards low-carbon earnings to be slower than peers, and sees no
room for a multiple expansion to offset the earnings decline
    ** Out of 29 analysts covering Equinor, eight rate it
"strong sell" or "sell", 10 rate it "hold", and 11 rate it
"sell" or "strong sell"

 (Reporting by Elviira Luoma)
 ((Elviira.luoma@thomsonreuters.com))