Numis analyst Thomas Martin continued to talk up Cairn Energy PLC (LON:CNE) whilst the broker downgraded its price target for the oil field developer.
Martin, in a note, detailed that the Numis target price reduced to 260p from 270p due to ‘a number of model updates’ (with the risked net asset value moving to 258p from 266p). The broker’s ‘buy’ recommendation remains.
The analyst emphasised the group has built a sustainable E&P business.
“We see the potential for Cairn to deliver multi-year, profitable, growth into the next decade,” Martin said in a note.
“This will initially come from the UK North Sea fields (Kraken and Catcher), with Skarfjell in Norway maintaining volumes in 2021-22, and the large SNE discovery offshore Senegal providing a further ~75% increase from 2019 levels in the next decade.
He added: “We expect Senegal to be de-risked as the project moves forwards.
“We believe Cairn is well-funded to develop SNE at its current equity interests and our base case forecasts, at lower oil prices we believe Cairn has lots of flexibility through potential farm-outs and a reduction in exploration spend.”