Credit Suisse has initiated coverage on west Africa focused oil giant Kosmos Energy PLC (LON:KOS) (NYSE:KOS) with a ‘neutral’ rating and a 700p price target, offering around 15% upside potential.
Kosmos shares were floated on the London Stock Exchange main market on August 21, providing a secondary listing to its New York Stock Exchange quote. In mid morning trading on Wednesday, Kosmos shares in London were flat at 599.5p.
READ: Kosmos Energy to join partners Tullow and BP with London listing
In a note to clients, Credit Suisse’s analysts said Kosmos “is the new 'bellwether' name among the European E&Ps, offering exposure to production ramp-up in Ghana (Jubilee and TEN) and gradual de-risking of world-class LNG hub offshore Mauritania/Senegal.”
However, they added that, trading at a circa 50% premium to the sector and 40% premium to the Norway-listed 'sector leaders', the analysts see better value elsewhere in their coverage.
READ: Kosmos Energy reveals Hippocampe-1 disappointment offshore Mauritania
They concluded that upcoming results of Lamantin in Mauritania is the near term catalyst, followed by operational momentum as drilling resumes in Ghana, while the main risks stem from disappointing exploration results and potential disruptions to production ramp-up.