Petrofac Limited (LON:PFC) has been upgraded to ‘buy’ from ‘neutral’ by analysts at Goldman Sachs, who said the oiler had higher exposure to capital expenditure (capex) from the Middle East, which was expected to be “more robust” in the face of the ongoing oil price war.
While the bank cut its target price to 316p from 433p to reflect lower earnings forecasts amid the recent fall in crude prices, Goldman said margin dilution for the firm was “already reflected in consensus” and they saw the risk/reward profile was “skewed to the upside”.
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“With its more defensive capex exposure, and with implied upside to our price target of 136%, we upgrade to buy”, the bank said.
Shares in Petrofac rose 0.7% to 174.9p in lunchtime trading.