Equinor Downgraded: Analyst Highlights Faster Balance Sheet Re-leveraging And Modest 2024 Distributions
Portfolio Pulse from Lekha Gupta
RBC Capital Markets analyst Biraj Borkhataria downgraded Equinor ASA (NYSE:EQNR) to Sector Perform from Outperform and reduced the price target to NOK390 from NOK350. The downgrade is due to expectations of faster balance sheet re-leveraging and more modest distributions in 2024, amid a subdued macro outlook and a lower commodity price forecast. The analyst revised the oil price deck down to $82.5/bbl for Brent in 2024 and anticipates negative earnings revisions for Equinor. Shareholder distributions are expected to decrease, with a projected $13.3 billion in 2024, including a smaller special dividend and a reduced share buyback program. EBIT estimates for FY24 and FY25 are both around 10% below consensus. Equinor's shares dropped by 0.49% to $31.56.
December 19, 2023 | 7:32 pm
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Equinor ASA was downgraded by RBC Capital Markets with a reduced price target, indicating potential negative earnings revisions and lower shareholder distributions in 2024.
The downgrade by a major analyst due to concerns over the company's financial outlook, including faster balance sheet re-leveraging and lower expected distributions, is likely to negatively influence investor sentiment and could lead to a short-term decline in Equinor's stock price.
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IMPORTANCE 90
RELEVANCE 100