Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Cairn Energy shares strengthen ahead of results thanks to broker upgrade

A new price target of 300p sees some 55% upside to Cairn's current price but the 'Bull' case goes much higher
oil and gas operations
Cairn releases financial results on Tuesday

Cairn Energy PLC (LON:CNE) shares traded positively on Monday as Morgan Stanley upgraded the oil firm ahead of its results statement later this week.

A new price target of 300p sees some 55% upside to the current price of 203.6p, though the American bank also highlighted that the ‘bull case’ has a “path to 500p”.

READ: Cairn Energy upgraded as analyst eyes exploration catalysts and a possible Indian windfall

Analyst Sasikanth Chilukuru, in a note, said that at the current price the market is only pricing in 60% of the Senegal project’s value and doesn’t factor in anything for the group’s Vedanta stake.

Cairn shares were up 6.46p or 3.3% changing hands at 202.86p.

Financial results due Tuesday

The oil firm releases its results tomorrow, and  investor attention will be on the new field start-up and cash flow growth.

Premier reassured on the jointly owned Catcher field - Cairn owns 20% of the field,  which is expected to produce some 60,000 boepd gross by April. Now, the focus will be on Kraken.

The heavy oil field is Cairn’s other flagship field development, though it experienced teething problems, so investors will be keen to see positive production stats and operational commentary.

Set to reach production targets

Deutsche Bank analyst David Mirzai, in a recent note, highlighted that Kraken “appears set to reach its revised production targets”.

“Despite start-up issues, the Kraken field appears set to reach its revised production targets, which added to the Catcher field ramp-up should help Cairn to generate >$250m of operating cash flow in 2018,” Mirzai added.

Any update on the large scale SNE development in Senegal will also be welcomed, as this project represents the most sUBStantial potential catalyst. In terms of the financial results, UBS analyst Amy Wong expects earnings (EBITDAX) of US$10mln, an operating loss of US$127mln and a net loss of US$90mln.

View full CNE profile View Profile

Cairn Energy PLC Timeline

Related Articles

oil and gas operations
February 16 2018
“I believe that the ENEO issue will be solved as VOG management has prioritised this matter and is focused on achieving a result in the shortest possible timeframe,” chief executive Ahmet Dik
1519654733_uranium.jpg
February 26 2018
Anfield Energy has a suite of attractive assets containing uranium and vanadium
oil and gas operations
January 24 2018
“The increase in production levels is due to successful work-overs and the implementation of production optimisation programs,” Cadogan said

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use