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Buy or sell EnQuest? City brokers undecided following new funding deal

Both Barclays and Liberum agree that the deal is a positive, but the outlook is very different.

Enquest offshore operations
Prevailing oil prices are key to the respective broker calls

City brokers are seemingly split on North Sea oiler EnQuest Plc (LON:ENQ) following last week’s US$100mln funding and new debt restructuring arrangements.

Both Barclays and Liberum agree that the deal is a positive, but their point of view is notably different.

Barclays’ analyst James Hosie says the funding give EnQuest a platform thrive in a rising oil price environment, whereas Liberum’s Andrew Whittock says the oiler’s valuation relies on higher crude prices.

EnQuest is today upgraded to ‘overweight’ from ‘underweight’ by Barclays, with Hosie saying: “We believe the stock currently offers an attractive opportunity for investors with a positive outlook on oil prices through 2017.”

Liberum meanwhile repeated a ‘sell’ recommendation, and kept a 25p which sees the price falling back from the current 29.35p level.

Elsewhere on Monday, HSBC upgrades United Utilities Group PLC (LON:UU.) to a ‘buy’ from ‘hold’, setting a £10.60 per share target which suggests some 12.5% upside to the current price of 941p.

Morgan Stanley downgrades UK department store Debenhams Plc (LON:DEB) to ‘equal weight’ from ‘overweight’.

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