Cairn Energy PLC (LON:CNE) has been downgraded by RBC Capital after a delay in the arbitration in which it is challenging the Indian government's use of retrospective legislation for taxes, as analysts readjust their valuation for what is rather than what might be.
RBC cuts its rating to ‘sector perform’ from ‘outperform, and, the price target was also downgraded.
“The chance of a quick, 160p, the payout has been deferred; fast money has moved on and we have cut our price Target from an event-driven 380p to a Tangible NAV-driven 225p,” RBC analyst Al Stanton said in a note.
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“At last week's peak, Cairn was up 43% year-to-date as the market speculated on a near-term (positive) result to Cairn’s long-running, $1.4bn Indian arbitration case.
“However, the ruling has been delayed and we see few, compelling, near-term catalysts; therefore expect the stock to track the oil price.”
Cairn shares presently change hands at around 175.5p.