Citigroup sees energy challenges persisting in 2025, cuts PT on US oil firms

Ovintiv

26/11/2024 15:41

** Citigroup cuts price target on U.S.-based oil and gas
companies as challenges for the energy sector carry over into
2025 
    ** Brokerage sees no scope for OPEC+ to reverse production
cuts in 2025, leaving an est. 8 mln barrels per day (mbpd) of
global oil market capacity on the sidelines
    ** Says "while we expect OPEC+ to stick to its current
strategy and keep this oil out of the market, capacity excess
means there is neither need for commodity price nor asset price
(equities) inflation"
    ** "2025 shouldn’t look any different – the oil market will
still be in overcapacity – unless the sector finds valuation
support" - Citigroup adds
    ** However, brokerage upgrades oil major Chevron  CVX.N  to
"buy" from "neutral" and raises PT to $185 from $145; sees
upside from Hess merger arbitration in 2025
 Company            New PT      Old PT      Upside to
                                            stock's
                                            last close
 APA Corp  APA.O    $24         $29         6%
 Devon Energy       $48         $55         25%
  DVN.N                                     
 Ovintiv  OVV.N     $54         $55         18%
 Occidental         $56         $57         11%
 Petroleum  OXY.N                           
 
 (Reporting by Pooja Menon in Bengaluru)
 ((Pooja.Menon@thomsonreuters.com;))