Jefferies has upgraded Ithaca Energy PLC (LSE:ITH) to 'Buy' and reinstated Enquest PLC (AIM:ENQ) as a 'Buy' also citing positive valuation momentum, operational improvements and sector-wide consolidation trends.
It comes as the American broker runs the rule of E&P stocks, highlighting both a positive performance in the sector generally and pointing to "active material shareholder involvement" in a number of names.
Meanwhile, spotlighting Ithaca, Jefferies analysts said the merger with Eni UK, along with other recent acquisitions, has lifted the operational profile and valuation.
Jefferies lifted its price target by 52% to 220p (currently: 185p), whilst pinpointing that shareholder engagement that's driving performance, noting Eni’s active involvement in Ithaca and comparing it favourably against peers, which the analyst reckons lack similar strategic backing.
Jefferies elsewhere reinstated coverage of EnQuest, with a 'Buy' and a 15p target (currently: 9.87p). The broker said it sees value in the company’s UK portfolio and a renewed focus on Southeast Asia, alongside a stronger balance sheet.
At the same time, Jefferies also upgraded Harbour Energy PLC (LSE:HBR) to 'Buy', raising the target to 290p (currently: 197p), but the analyst team said the North Sea's largest producer lags the others, in part, because of weaker shareholder support.